Unveiling the 5 Cannabis Stocks to Sell in 2024 which are Legal

Unveiling the 5 Cannabis Stocks to Sell in 2024 which are Legal

Recent developments in the potential federal legalization of cannabis may lead some to focus on which cannabis stocks to buy, rather than considering those to sell. While there are positive signs, such as the U.S. Department of Health and Human Services recommending the rescheduling of marijuana, the timing and certainty of federal-level reforms remain unclear.

Despite widespread support for marijuana legalization (70%) and bipartisan backing, efforts for cannabis reform in Congress have faced challenges. The Biden Administration’s attempts to ease federal restrictions have not significantly benefited the legalized cannabis industry, hindering access to banking services and preventing Canadian cannabis companies from entering the U.S. market.

Amid this uncertainty, it is prudent to evaluate certain cannabis stocks for potential divestment. Here are five cannabis stocks that may face challenges in 2024:

1. Aurora Cannabis (ACB): While Aurora Cannabis has diversified its operations into cultivating vegetables and orchids to utilize excess capacity, negative factors like dilutive equity raises have led to a significant drop in stock prices (approximately 60% in the last twelve months).    Continued impatience regarding the opening up of the U.S. legal cannabis market may impact ACB’s performance.
2. Canopy Growth (CGC): Canopy Growth, once popular during the pot stock waves, has seen a substantial decline in stock prices (nearly 99%) and remains cash-crunched. Without significant progress in U.S. legalization and ongoing financial challenges, CGC’s poor performance might persist.
3. Cronos Group (CRON): Despite appearing to show improvement in financial performance, Cronos Group’s narrowing losses in Q3 2023 were influenced by factors like increased interest income and a foreign currency transaction gain. With potential challenges like lower interest rates and fewer one-time gains, future results for CRON may not be as impressive.
4. GrowGeneration (GRWG): GrowGeneration, a retailer of hydroponic and pot cultivation equipment, faces headwinds from lower demand and the impact of high inflation on operating expenses. Despite being less dependent on federal changes, GRWG’s stock has fallen considerably (45.9%) in the past twelve months, and sell-side earnings forecasts predict another year of declining revenue and heavy losses.
5.     OrganiGram Holdings (OGI): OrganiGram Holdings, based in Toronto, struggles to attain profitability. While a recent capital infusion from British American Tobacco may seem positive, the success of bolt-on acquisitions in a challenging market remains uncertain. The company’s prospects may be overshadowed by delays in U.S. legalization affecting the broader cannabis industry.

Investors are advised to carefully consider these factors and conduct thorough research before making decisions about holding or selling these cannabis stocks in the current legal landscape.