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Editor’s Note: Today we’re welcoming Benjamin Shepherd to the Wyatt team as an analyst. Ben joins us with over 10 years working at some of the biggest newsletters in the business; he has a proven track record of success. Specializing in biotech, he’s scored big wins in the industry over the years.
By Benjamin Shepherd
If Canada proves anything, it’s that there’s huge demand for pot.
Since Canada legalized in October, shops in Quebec have been closing three days a week. Alberta has stopped issuing retail marijuana licenses. Ontario – Canada’s most populous province – is opening just 25 stores.
Why? Because they can’t keep up with huge demand in the cannabis market.
Go here for my urgent pot stock briefing – BEFORE these stocks take off (again).
True, there have been logistical challenges getting weed from growers to the stores. But insiders also say the government has been too slow issuing new growing licenses.
That’s holding back much needed supply, and it’s only going to get tighter. In an interview, Cronos Group (NSDQ: CRON) CEO Mike Gorenstein said growers will have a hard time keeping up with global demand.
Believe it or not, that’s great news for pot companies. In mid-December, half of the products for sale in five provinces were out of stock. Everything’s selling as fast as retailers can put it on a shelf.
We got an idea of what that could mean for pot companies on Tuesday. In its quarterly guidance, Aurora Cannabis (NYSE: ACB) says it expects a big jump in sales.
Aurora expects that it brought between $50 million and $55 million in revenue for the quarter. True, that number disappointed analysts who were predicting $67 million.
But even at the low end of the range, that’s 327% growth over the year-ago quarter and 68% higher than the last one. Some think Aurora lowballed its estimate so it can beat it.
Analysts were disappointed, but the markets sure got the message. Since Aurora issued its guidance, its shares have shot up by more than 20% in three days.
And there’s more upside to come as dispensary shelves are finally stocked.
Imagine the sort of growth Aurora will turn in as it ramps up production.
Its huge Aurora Sky facility in Edmonton can produce 220,000 pounds of marijuana a year for the cannabis market. Right now, it’s only operating at 25% capacity.
Production should rise this year, as the government awards more licenses.
Legal cannabis sales are expected to reach $250 million in Canada. And that’s just for the final three months of last year!
Canadian pot stocks – including Aurora Cannabis – could deliver blowout financial results in February. And that could lift the best stocks in the sector.
But the opportunities don’t just end at the Canadian border.
Illinois, New Jersey and New York are planning to legalize recreational cannabis sales in 2019. And even the Feds are considering codifying their “hands-off” approach with new legislation called the STATES Act.
If it’s hard keeping up with roughly 4 million Canadian smokers, imagine what will happen here in the U.S.
The U.S. legal cannabis market is expected to grow 931% over the next 10 to 12 years – before reaching $100 billion.
That makes it the fastest-growing industry in more than a century.
Are you ready to profit with the best pot stocks?
Click here now for my urgent briefing: Marijuana Outlook 2019.
Yours in Profits,
Ben Shepherd