ACB $5.110 (-7.26%)

ACNNF $0.056 (-3.78%)

AERO $3.210 (0%)

ALEAF $0.100 (-0.29%)

AMMJ $0.059 (-1.67%)

APHA $15.380 (0%)

ARNA $91.980 (-0.72%)

ATT:CNX $0.080 (0%)

AUSA:CNX $0.135 (3.85%)

AUSAF $0.105 (-7.64%)

AVXL $13.220 (-8.13%)

BAMM:CNX $0.355 (-1.39%)

BBM:CNX $0.060 (0%)

BBRRF $0.056 (1.22%)

BE:CNX $0.005 (0%)

BIO:CNX $0.035 (0%)

BLIS:CNX $0.315 (0%)

BLO:CNX $0.810 (3.85%)

BLOZF $0.639 (10.17%)

BUDZ $0.200 (-9.09%)

CADMF $0.138 (-4.51%)

CALI:CNX $0.195 (0%)

CANN $0.350 (-2.91%)

CARA $11.540 (-3.43%)

CBWTF $0.140 (-2.68%)

CGC $7.780 (-7.38%)

CGRW $0.057 (-0.35%)

CHOO:CNX $0.040 (14.29%)

CHOOF $0.030 (0%)

CNBX $0.110 (0.55%)

CNGGF $0.201 (-0.65%)

CODI $26.130 (-2.5%)

CPMD $0.021 (10.53%)

CRBP $0.500 (-6.77%)

CRON $3.680 (-6.36%)

CROP:CNX $0.015 (0%)

CSI:CNX $0.200 (0%)

CURR $0.340 (2.41%)

CVSI $0.154 (-16.98%)

DIGP $0.033 (16.25%)

DXBRF $0.029 (0%)

EEVVF $0.115 (0%)

EMHTF $0.048 (0.42%)

EPWCF $0.247 (-7.87%)

EVIO $0.001 (0%)

FFT:CNX $0.040 (0%)

FNNZF $0.160 (0%)

GNBT $0.055 (-2.31%)

GRIN:CNX $0.095 (5.56%)

GRWG $8.890 (-5.17%)

GTBIF $20.298 (-0.12%)

GTII:CNX $25.000 (-1.5%)

GWPH $218.960 (0%)

HEXO $0.586 (-6.69%)

HHPHF $0.104 (0%)

HLSPY $0.363 (0%)

HMLSF $4.620 (-1.94%)

HMPPF $0.498 (0%)

HRVOF $0.050 (-8.21%)

HSTRF $0.135 (0%)

HUGE:CNX $1.280 (-0.78%)

IAN:CNX $0.203 (-1.22%)

IGC $0.980 (-0.43%)

IGXT $0.345 (1.41%)

IIPR $200.430 (-2.64%)

INQD $0.009 (-8.5%)

IONC:CNX $0.025 (0%)

IONKF $0.019 (-1.78%)

ISOL:CNX $0.035 (0%)

ITHUF $0.166 (-2.12%)

IVITF $0.001 (0%)

KALTF $0.159 (-7.23%)

KBEV:CNX $0.045 (0%)

KHRNF $0.185 (-4.15%)

KSHB $0.695 (0%)

LHS:CNX $1.470 (0%)

LHSIF $1.145 (0%)

LXX:CNX $8.400 (0%)

MCIG $0.028 (0%)

MEDIF $0.167 (-2.79%)

MGWFF $0.105 (-2.33%)

MJ:CNX $0.135 (0%)

MJNA $0.019 (-3.65%)

MNTR $0.055 (-6.3%)

MYM:CNX $0.140 (0%)

MYMMF $0.106 (0%)

NCNNF $0.058 (0%)

NDVAF $0.250 (-4.96%)

NGW:CNX $0.410 (-1.2%)

NRXCF $0.056 (1.27%)

NSPDF $0.029 (0%)

NVTQF $0.749 (0%)

NWKRF $0.424 (0%)

NXGWF $0.328 (2.53%)

NXTTF $0.085 (-2.53%)

OH:CNX $5.330 (0%)

ORHOF $4.050 (0%)

PHCG $0.200 (34.77%)

PHVAF $0.038 (0%)

PILL:CNX $0.690 (-1.43%)

PKG:CNX $0.050 (0%)

PLPRF $0.357 (0%)

PLUS:CNX $0.440 (0%)

PMCB $2.300 (-4.96%)

PNPL $0.010 (0%)

PTNYF $0.045 (0.22%)

QCA:CNX $0.140 (0%)

RDDTF $0.032 (-7.9%)

RLLVF $0.011 (0%)

RMHB $0.027 (-0.37%)

RQB:CNX $0.005 (0%)

RQHTF $0.836 (-2.43%)

SLNG:CNX $0.080 (6.67%)

SMG $161.370 (0.37%)

SNN:CNX $0.155 (0%)

SOL:CNX $2.200 (-2.22%)

SOLCF $1.793 (-3.6%)

SPLIF $0.050 (-21.56%)

SPRWF $0.268 (0%)

SRNA $0.049 (-0.4%)

STEM:CNX $0.150 (-6.25%)

STMH $0.120 (-3.69%)

SUN:CNX $0.150 (0%)

TBPMF $0.103 (7.31%)

TCAN:CNX $0.450 (-2.17%)

TCNAF $0.250 (0%)

TER:CNX $6.890 (-1.57%)

TGEN $1.130 (-4.24%)

TGIF:CNX $0.050 (-9.09%)

TGIFF $0.039 (9.19%)

THC:CNX $0.080 (6.67%)

THCBF $0.069 (15.98%)

TLRY $6.290 (-8.31%)

TRLFF $0.108 (-2.09%)

TRSSF $5.590 (-3.45%)

TURV $0.006 (0%)

VIDA:CNX $0.055 (0%)

VIN:CNX $0.045 (-10%)

VPRB $0.056 (-13.06%)

VRTHF $0.014 (-77.16%)

VVCIF $0.056 (-6.82%)

WAYL:CNX $0.740 (0%)

XXII $2.350 (-4.86%)

ZDPY $0.778 (0%)

ZYNE $2.450 (-6.84%)

Back

These 3 Major Catalysts Could Drive Cannabis Stocks Higher In 2022

Jan 11, 2022 • 7:38 AM EST
4 MIN READ  •  By Michael Berger
Share Share - Facebook Share - Twitter

Although 2022 has quickly proven to be a choppy year for the cannabis sector, we believe the industry is positioned to record strong growth in the years ahead. According to analysts from Bank of America, the legal cannabis industry in the United States (US) increased by approx. 40% in 2021 and generated approx. $25 billion of sales.

The Wall Street Bank reported that global cannabis sales increased to $31 billion in 2021 and we are not surprised that the US accounted for roughly 80% of total cannabis sales. In the coming years, we expect the US to continue to account for the vast majority of cannabis sales and believe the trend could change once the European Union’s (EU) industry ramps up.

When it comes to the cannabis market in the EU, we are the most bullish on the opportunity in Germany and expect the recent change in leadership to be a catalyst for its cannabis industry. Once Germany passes legal recreational cannabis legislation, we expect other countries in the EU to follow its lead and believe our readers should be aware of this potential catalyst.

Today, we want to highlight 3 key themes that we expect to have a major impact on the cannabis industry in 2022. From the EU to the US, several cannabis markets are reaching an inflection point and we believe that our readers need to be aware of these key long-term growth drivers for the sector.  

US Legalization is the Biggest Potential Catalyst for the Sector

We believe the biggest potential catalyst for the sector is the passing of pro-cannabis legislation in the US. Last year, the cannabis sector was under pressure after the SAFE Banking Act was not included in the National Defense Authorization Act (NDAA). We consider cannabis legislation reform to be a question of when, not if, and expect to see advancements in the US this year. 

Another attractive aspect of the US cannabis industry is related to the opening of new medical and/or recreational markets. Later this year, we expect several states to legalize recreational cannabis and believe this will be a catalyst for the US market.  According to a poll conducted by Gallup (November 2021), 68% of Americans support cannabis legalization and we are favorable on the increasing amount of support for the industry.

When cannabis legislation failed to advance in 2021, the sector came under heavy pressure and this is a trend to be aware of. Although leading US multi-state operators (MSOs) are reporting record amounts of quarterly revenue, companies continue to be under pressure and we believe there is a major disconnect with the market. 

2022 is a Make or Break Year for Several Canadian Operators 

US MSOs were not the only operators to be under pressure in 2021 and Canadian Licensed Producers (LPs) were some of the biggest underperformers of the year. So far this year, these operators have remained under pressure and COVID lockdowns have been impacting the growth of the sector. 

Companies like Canopy Growth Corporation (TSX: WEED) (Nasdaq: CGC) and Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB) have been especially impacted by the pandemic and we will monitor how these operators are able to bounce back this year. 

For many Canadian LPs, we expect 2022 to be a make or break year for the businesses. This year, we expect the Canadian cannabis market will be highlighted by two main themes, consolidation and bankruptcies. Last year, we saw an increase in the number of mergers and acquisitions (M&A) in Canada and expect this trend to be more significant this year. 

Which International Markets Will Grow the Most in 2022?

From the EU to Latin America, legal cannabis is becoming a major theme in markets all over the world. We believe the international cannabis industry is in the early innings of a major growth cycle and are the most favorable on the long-term opportunity in Colombia, Germany, Israel, and Mexico. 

Last year, Mexico almost legalized recreational cannabis, however, legislation that was supported by the President stalled in the Senate. We believe the cannabis opportunity in Mexico is massive and are bullish on the long-term growth prospects that are associated with it. 

Currently, there is no clear leader in Mexico’s cannabis industry and expect to see companies battle for market share once legalization becomes a reality. We are of the opinion that Canadian LPs and US MSOs will both be highly focused on the opportunity in Mexico and our readers need to be aware of this.

Germany is another market that we are bullish on and expect to see recreational cannabis legalized later this year. We expect the German cannabis industry to benefit from a change of leadership and will monitor how this helps the companies that are levered to it. Although most of the businesses that are levered to the cannabis market in Germany are Canadian LPs, we expect to see leading US operators enter the market once there is more visibility associated with a change in legislation. 

If you are interested in learning about the companies that are positioned to capitalize on certain international cannabis markets, please send an email to support@technical420.com with the subject “Cannabis Companies With International Leverage” to learn more. 

For the fastest access to data on companies that are positioned to capitalize on certain international cannabis market, sign up for our free newsletter!

Share Share - Facebook Share - Twitter

Tags

Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Comments

Get the Latest Cannabis News & Stock Picks.

Enter your email below to join the official Technical420 newsletter.

 All good -- no spamming here.