In prior pieces, I’ve highlighted several reasons why Aurora Cannabiswas one of my preferred picks in the highly speculative marijuana market. Aurora was growing tonnes of weed in a somewhat efficient manner, which is how a firm can succeed in a commoditized market.

Although you could make a quick buck from betting on cannabis cultivators, I’d much prefer owning shares of a company that’s able to differentiate itself in some form or another. As a grower and distributor of weed, there isn’t much wiggle room to promote brand differentiation with all the regulations that are in place.

Ontario’s second pot licence lottery will go ‘quite smoothly,’ lawyer says

The legal marijuana industry is transitioning from its growth phase into its profit phase as more and more markets open for business.

One of the many benefits of this transition is that the biggest fear of investors— that marijuana stocks are overvalued and won’t be making money any time soon—are assuaged. The result is that the top pot stocks will see big gains.

That’s exactly what’s happening with Aphria Inc (NYSE:APHA). Aphria stock jumped by more than 32% in after-market trading following an announcement on August 1 that the company became the first major Canadian pot producer to turn a net profit.

For years, marijuana stocks have been the buzzy go-to investment. If investors had the stomach and wherewithal to invest in some of the most popular names back at the beginning of 2016, they'd likely be sitting on gains of more than 1,000%right now. Even investors who bought into the industry during the first quarter made out quite well, with the Horizons Marijuana Life Sciences ETF , which holds more than four dozen cannabis stocks of various weightings, gaining over 50%.

Despite the range of issues that have emerged in recent months and impacted cannabis stocks, including Canopy Growth’s horrendous fiscal 2019 results and CannTrust’s regulatory investigation, cannabis cultivator Aphria (TSX:APHA)(NYSE:APHA) delivered an unexpected profit.

The relative strength index, or RSI, is an indicator measuring the degree of recent price changes. RSI is used to evaluate overbought or oversold conditions in the price of an asset. Generally, RSI is considered overbought when above 70 and oversold when below 30. Traders often use RSI as a potential indicator towards what direction an asset’s price might move. If a stock is overbought, that means that analysts or traders believe it is trading above its intrinsic value. If a stock is oversold, analysts or traders believe it is trading below its intrinsic value and has the potential for a price bounce. Today we’ve found four oversold Canadian marijuana stocks: cannabis stocks with an RSI below 30 on a basis of their 7-day RSI and 14-Day RSI.

The nascent marijuana industry has come a long way over the past few years, and while there’s still ample profit to be had from the budding market, the most significant opportunities in the space may be lying outside of the scope of the average investor.

A majority of the hype has undoubtedly been aimed at cannabis cultivators, and while that’s the natural place to go looking for ways to gain exposure to the marijuana space, it’s not the only (or best) way as we wrap up Year One of nationwide legalization.

Many other cannabis sub-industries are gaining more traction, and as the industry matures, there will be multi-baggers that aren’t in the business of growing weed.

 Choom™ (CSE: CHOO; OTCQB: CHOOF), an emerging adult use cannabis company that has secured one of the largest national retail networks in Canada, is pleased to announce that it has signed a definitive agreement to acquire The Green Room, a popular cannabis retail store chain which has operated since 2016. 

The anniversary of the Cannabis Act is a few months away. Despite the twists and turns that have emerged, investors remain passionate about the marijuana industry.

Today, at the halfway mark of 2019, let’s grade the top five marijuana stocks.

The “dawn”

Aurora Cannabis (TSX:ACB)(NYSE:ACB) is living up to its name. The company’s name derives from the Latin word aurora, which means “dawn.” Yes, the largest cannabis producer is seeing the break of day and is the brightest spot in the sector at the moment.

Holding an underperforming stock in your portfolio can be very risky, as you could be setting yourself up for even greater losses. Below are three stocks that have not been doing well this year and that investors may be better off just selling:

Bombardier, Inc. (TSX:BBD.B) reported yet another disappointing quarter last week. Not only did the company post a net loss of $36 million, which was down from a $70 million profit a year ago, but it also adjusted down its forecast for the year as well.

Free cash flows are also expected to be worse than expected for the year as the company stated it would be investing more money into its rail division.