one more for you, last one, good reading
The pure-play pot stock with the best operating margin might surprise you
While there's absolutely some guesswork at play here given the fact that recreational marijuana is still illegal in all but one country worldwide, my belief is that MedReleaf (NASDAQOTH:MEDFF) will eventually generate the best operating margin of all pure-play marijuana stocks.
MedReleaf offers a lot of the same growth tactics as its peers. It's a Canadian cannabis grower that's built up its eligible medical patient base, raised cash for expansion (albeit in its case it did so through an initial public offering, rather than through multiple bought-deal offerings), and worked to grow its capacity.
But MedReleaf has two advantages up its sleeve. First, it tends to hit a more affluent medical cannabis clientele, which could translate into bigger bucks if Canada approves adult-use weed by July 2018. More expensive cannabis strains generally mean higher margins.
Yet in the grand scheme of things, dried cannabis margins tend to underwhelm compared to other pot products. In particular, cannabis oils tend to have the best margins in the industry due to their considerably higher price point than dried cannabis. As of the end of 2016, MedReleaf controlled nearly 45% of Canada's cannabis oils market. This focus on consumers who want a higher-quality product should pay off in the form of the best operating margin, in my opinion.
If you're looking to add a marijuana stock to your watchlist, MedReleaf might be the name to consider.
