3 Cannabis Stocks to Avoid in October By StockNews

© Reuters. 3 Cannabis Stocks to Avoid in October

The cannabis industry has made great strides over the last decade especially as public attitudes improve. The sector has also generated significant attention from investors who must steer clear of low-quality stocks. Considering this, we believe they should avoid stocks like Harvest Health & Recreation (HRVSF (OTC:)), TerrAscend (TRSSF), and OrganiGram (OGI).Although the U.S. cannabis industry has been gaining steam due to the legalization of recreational marijuana in several states, there continue to be major obstacles including legalization at the federal level. Further, cannabis has proven itself quite easy to grow with few barriers to entry which means that marijuana producers are unlikely to deliver great returns for investors.

Furthermore, with the laws around cannabis becoming gradually favorable, more players are entering the cannabis space, making the industry highly competitive. This could negatively impact the market share of existing players and place more downward pressure on prices.

Given this backdrop, it could be wise to steer clear of cannabis stocks Harvest Health & Recreation Inc. (HRVSF), TerrAscend Corp. (TRSSF), and OrganiGram Holdings Inc. (NASDAQ:), which possess weak fundamentals.

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