This Pot Stock Could Be an Even Hotter Buy Than Aurora Cannabis Inc. (TSX:ACB)

Aurora Cannabis Inc. (TSX:ACB) and other pot stocks are starting to see a lot more competition in the industry.

| More on:

It can be difficult to keep up with the constantly changing landscape in the marijuana industry. With many new entrants getting listed on the exchanges, it can be hard for investors to keep track of all the competition.

Green Organic Dutchman Holdings Ltd. (TSX:TGOD) is a great example, as it has been listed on the TSX only since May, and already its share price has skyrocketed in value. In just the past month, Green Organic’s share price has more than doubled, and there remains a lot of bullishness about the company’s long-term future.

What has gotten investors so excited about the stock?

A few weeks ago, Green Organic had announced that it had entered an agreement to license RIPPLE SC and other proprietary infusing technologies. While it is still patent-pending, there are a couple of big reasons why investors see a lot of value in this technology.

The first is that it would allow cannabis-infused beverages to get into your bloodstream in about 15 minutes, and it can stay there for up to four hours. It allows users to quickly get a high and enjoy the effects for a long duration of time.

The second reason is that the technology doesn’t require sugar to be added in the process, and that will be of utmost importance to medical marijuana users that need to a healthy way to consume cannabis, especially if it is done so through a beverage.

It should be noted that the agreement with Stillwater Brands for the licence is exclusive, and that will give Green Organic a distinct advantage in the market when edibles become legal to sell, which is expected to happen sometime next year.

Rob Anderson, the CEO of Green Organics, is very optimistic about the opportunity, stating in the company’s release, “This technology will allow TGOD to provide patients and customers around the globe with novel and effective dose-controlled delivery systems that are safer, more standardized, and more discreet than most current cannabinoid delivery systems.”

Key partnership also a big advantage

However, it’s not just the edibles market that has investors bullish on the market. Prior to its IPO, Aurora Cannabis Inc. (TSX:ACB) had invested $55 million in the company to obtain a more than 17% ownership in Green Organics. The close relationship between the two companies will help add credibility to Green Organic and will make it easier to obtain market share in the industry.

Is Green Organic a buy?

With its stock price up 100% since May, Green Organic has done exceptionally well, perhaps even too well for investors to consider buying today. Its market cap has already hit over $1.4 billion, making it one of the largest cannabis stocks on the TSX in a very short period of time.

Although there is no denying the market for edibles and the potential that exists there, I’d be very hesitant investing in the company today. There’s a lot of risk in investing in a company that has no revenue, and a lot can change in the market by the time it is ready to open its doors. However, for investors willing to take on the risk, the returns could be significant.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any of the stocks mentioned.

More on Investing

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

Canada day banner background design of flag
Investing

Got $500? 5 Top Canadian Stocks to Buy and Hold

These top Canadian stocks have solid fundamentals with potential to outperform the benchmark index by a wide margin.

Read more »

man touches brain to show a good idea
Energy Stocks

1 No-Brainer Energy Stock to Buy With $500 Right Now

Should you buy a cyclical energy stock at its decade-high? Probably not. But read this before you make a decision.

Read more »

Asset Management
Stocks for Beginners

TFSA: 4 Canadian Stocks to Buy and Hold Forever

Thinking about what to buy with the new TFSA contribution space in 2025? These four Canadian stocks are worth holding…

Read more »

A solar cell panel generates power in a country mountain landscape.
Energy Stocks

Top Canadian Renewable Energy Stocks to Buy Now

Here are two top renewable energy stocks long-term investors can put in their portfolios and forget about for a decade…

Read more »

ETF stands for Exchange Traded Fund
Investing

Here’s the Average TFSA Balance at Age 54 in Canada

Here are two ways to optimize your TFSA for either growth or income via ETFs.

Read more »

oil and gas pipeline
Energy Stocks

Where Will Enbridge Stock Be in 3 Years?

After 29 straight years of increasing its dividend and a current yield of 6%, here's why Enbridge is one of…

Read more »