3 Canadian cannabis stocks to buy under $20

Highlights

• Research suggested that Cannabis sales recorded a new monthly high worth $ 356.9 million for August.
• The S&P/TSX Cannabis Index rose by about 6.02 per cent over the past year.
• A pot stock mentioned here soared by almost 65 per cent on a year-over-year basis.

In the month of August 2021, Canada saw cannabis sales record a new monthly high of C$ 356.9 million, marking a year-over-year (YoY) growth of 5.2 per cent, according to Statistics Canada.

Also, notably, the S&P/TSX Cannabis Index noted a YoY growth of about 6.02 per cent Friday, October 22.  

Although the index dropped by 4.86 per cent on a quarter-to-date (QTD) basis, major cannabis giants that have the capacity to cultivate at a large scale could stay in an advantageous position if demand remains high.

Also read: 3 top Canadian psychedelic stocks to buy

So, here are some Toronto Stock Exchange (TSX)-listed pot stocks for those interested in exploring the cannabis sector.

1.    Aurora Cannabis Inc (TSX: ACB)

Cannabis producer Aurora Cannabis Inc saw its stock wrap trade at C$ 8.75 apiece, down by 4.267 per cent, on Friday, October 22. It also plummeted by about 17 per cent on a year-to-date (YTD) basis and declined by more than 35 per cent in the last nine months.

Further, it dropped by almost 15 per cent in the previous six months and dipped by nearly two per cent in the past three months.

However, ACB stock has surged by more than 38 per cent over the previous year.

The pot stock also appears to be in the recovery phase as it has risen by about 14 per cent in the last one month.

The Edmonton, Alberta-headquartered producer saw its net revenue from the consumer segment decline by 45 per cent YoY to C$ 19.5 million in the fourth quarter of 2021. This dip was primarily caused by reduced orders due to lockdown restrictions.

However, in the latest quarter, Aurora also recorded a net revenue of C$ 35 million in its medical segment, reflecting a YoY surge of nine per cent.

2.    Canopy Growth Corporation (TSX: WEED)

Integrated cannabis company Canopy Growth Corporation saw its scrip close at C$ 16.53 apiece, down by 4.836 per cent, on October 22.

At this price level, the pot stock was nearly 77 per cent below the 52-week high of C$ 71.6 reached on February 10 this year.

However, WEED stock also noted a recovery of nearly one per cent in the last week.

On the financial front, Canopy Growth posted net revenue worth C$ 136 million in the first quarter of fiscal 2022, up by 23 per cent from the same quarter a year ago.

The company also reported a total cannabis revenue of C$ 93 million, indicating a YoY growth of 17 per cent for Q1 2022.

3.    Tilray Inc (TSX:TLRY)

A global cannabis producer, Tilray Inc saw its stock move down by 3.986 per cent to C$ 13.73 on October 22. At this level, it had also slid by more than 83 per cent from its 52-week high of C$ 67 (February 10, 2021).

However, TLRY stock has soared by almost 65 per cent on a YoY basis and expanded by about 34 per cent on YTD.

The cannabis giant saw its net revenues soar to a value of C$ 168 million in its latest quarter, reflecting a YoY surge of 43 per cent.

Also read: Will Tilray (TLRY) become the next big cannabis stock in North America?

Bottom line

Some market experts note that the Canadian cannabis market possesses a significant growth potential as its neighbor in the south, the US, mulls over a federal decriminalization of recreational pot.

Another factor that could help pot producers further is its reportedly cheaper prices from what it was earlier, which, in turn, could raise demand and drive up sales in the sector.

However, investors should consider the risk, macroeconomics and microeconomics factors that are likely to impact the sector and stock market environment before taking any investment decisions.

Also read: 5 Canadian bank stocks to buy before their dividends surge