TGOD stock is down 5% and selling for $3.99 CAD at present. A victim of the broader market sell-off, the entire marijuana index dropped 4% in the last 24-hours.
Despite the wider market downtrend, The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) is a potential winning stock for investors for several reasons.
Let's check them out.
TGOD Stock: Artisan Marijuana
Cannabis growers have been ramping up capacity fast in order to meet demand. In a busy mass-produced market, it is assuring how much emphasis TGOD still places on quality. This may prove itself a winning tactic.
By priding itself as an organic marijuana grower, using “certified organic soil” to produce “clean, natural" cannabis "free of synthetic fertilizers and chemicals,” The Green Organic Dutchman has created a lucrative niche for itself. By selling premium cannabis, it is able to charge premium prices. And people are willing to pay for quality.
There is a downside, however. The process to create such high-quality cannabis is more costly, and this could undermine earnings margins down the line. This would, of course, affect TGOD stock value.
At the same time, if customers continue to pay for artisan cannabis, then the company may offset those higher production costs with ease.
We know that artisan food and drinks earn a loyal and premium consumer base, but artisan cannabis?
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TGOD Stock: Production Capacity
The Green Organic Dutchman focuses on high-quality cannabis, but that doesn't mean it is lagging in production numbers. On the contrary, TGOD is one of the top ten producers by annual peak capacity. With an estimated yield of 150,000 kilograms by 2020, TGOD is sitting comfortably beside much bigger competition with much deeper pockets.
As analyst Prosper Bakiny states:
"To stand out in a crowded field of competitors, the ability to produce more than its rivals is one of the tools in the belt of cannabis companies."
With a market cap of $1.83 billion CAD, TGOD has this tool firmly in its belt for a mid-tiered cannabis company.
TGOD Stock: International Operations
Expanding into Europe is another important feat to make as a cannabis producer. There is more work to be done, but already, TGOD has established a solid foothold in Denmark and Poland with two agreements: Queen Genetics/Knud Jepsen A/S and HemPoland.
In the coming years, Europe is expected to become the biggest cannabis market on the planet. Foreseeing this potential will define the leaders. Expanding here is a healthy start that offers TGOD stock the opportunity to capitalize on a mammoth potential.
There are a host of cannabis plays out there for investors wanting to partake in this exciting market. It can be hard to choose the right one, so always take your time to do the research and choose wisely. Is TGOD stock for you?
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