Potential11 Mar 2021 14:46
Definitely starting to get interest/noticed by a fair few institutions..
MGC Pharmaceuticals: pure-play medicine
MGC Pharmaceuticals was the first of the three to get listed. Unlike the other two, however, it is an AIM stock. It focuses purely on cannabis-based medical treatments, especially for epilepsy.
It has made some business headway, evident in the fact that it reported sales of $456,000 during the December 2020 quarter. This is a 67% increase over the quarter before.
It functions in geographies like the UK, Australia, and Brazil, but is loss-making at present.
Big risks ahead for cannabis stocks
A loss-making company to me is typically a red flag, with the exception of high-growth markets.
That said, there are big risks to consider here. Cannabis is still a nascent market, and future research could show that its harmful effects outweigh the positive ones. This has been the case with vapes. This puts the industry’s future in jeopardy.
Also, societal attitudes towards cannabis are still evolving. So these products may not see the kind of reception that is forecast. In other words, the market can fail to develop, which will impact the sector’s and these companies’ growth.
The takeaway for cannabis stocks
I am a believer in the potential value of this industry. But at this stage it is risky. I am watching these stocks, though.