2 cheap cannabis stocks that could skyrocket in 2022

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Cannabis stocks were great vectors of growth after the 2015 Canadian federal election. Justin Trudeau’s Liberals kept their big legislative promise and legalized recreational cannabis across Canada. This came into effect in October 2018. Since then, cannabis stocks have been a disappointing headache. Today I want to take a look at two cannabis stocks that could reverse this trend in 2022. Should investors be confident in this struggling sector? Let’s find out.

Legalization in the United States seems unlikely: Should you bail out that cannabis stock?

Canopy growth (TSX: WEED) (NYSE: CGC) maintained its position as one of the leading producers in Canada. Shares of this cannabis stock plunged 66% in 2021 to the close on December 20.

In the second quarter of fiscal 2022, Canopy Growth was forced to push back its projection of positive Adjusted EBITDA due to ongoing supply issues. Worse, he faces a delayed US revenue map. No Canadian company has been better positioned to penetrate the vast United States market. Sadly, the path to recreational legalization in the United States seems more uncertain than ever.

Earlier this year, I had discussed the optimism for legalization which had resulted in an increase in cannabis stocks. That hope has largely faded as we look to 2022, mostly among CEOs of cannabis companies like Canopy CEO David Klein. Indeed, the best investors can hope for in 2022 is a push to decriminalize cannabis. The Biden administration is facing the potential implosion of its Build Back Better bill due to dissent among some of the main Democrats. This could set a worrying tone for the administration’s legislative program.

Barring a remarkable breakthrough, Canopy Growth will need to gain momentum here. Fortunately, there are some promising signs for the industry as a whole on the home front.

Cannabis sales have jumped in Canada: that’s good news for this stock!

Cannabis sales in Canada gained significant momentum in the second half of 2021. This performance was driven by sales in the province of Ontario. In August, Ontario and British Columbia accounted for 91.1% of the growth in retail sales. Quebec has fallen behind its peers and has maintained the ban on vaping products at the time of writing.

This month, the Ontario Cannabis Store (OCS) said 54% of cannabis purchases made in the province between July and September were linked to legal retailers. Legal retailers have been able to beat the illicit market for the first time since the legalization of entertainment. The industry will need to maintain this trend and extend its lead in the illicit market in order to satisfy investors in the future.

Tilray (TSX: TLRY) (NASDAQ: TLRY) is another top cannabis stock that struggled badly in 2021. Earlier this month, I suggested investors look to get hold of Tilray in case of decline. Shares of this cannabis stock fell 50% in 2021 to the close on December 20.

The company is expected to release its next batch of results on January 10, 2022. During the first quarter of fiscal 2022, Tilray reported growth in net sales and gross margin of 43% and 46%, respectively. , compared to the previous year. It also achieved its 10th consecutive quarter of positive adjusted EBITDA. Tilray is a legitimate powerhouse in this space, and it deserves your attention ahead of the New Year. This cannabis stock’s shares last had an RSI of 28, putting it in technically oversold territory.

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