As a new year gets underway, investors and analysts are hard at work looking for the breakout stocks across many different sectors. We’re less than a week into the year, but as most Canadian cannabis stocks are displaying poor performances, one has moved in the opposite direction. Flora Growth Corp. (NASDAQ:FLGC) isn’t as well known as its larger peers Cronos Group (NASDAQ:CRON) and Tilray (NASDAQ:TLRY). However, while those names have been plunging, FLGC stock has been shooting up after the announcement of an important retail deal.
What’s Happening With FLGC Stock
Early December 2021 saw Flora Growth successfully expand into international markets when it confirmed an agreement to export its Mind Naturals and Awe CBD skincare brands to large-scale buyers in Mexico and Spain. This news sent FLGC stock shooting up. And despite some dips through December, it is back to climbing upward again after this morning’s announcement. Indeed, this morning Flora Growth announced that Mind Naturals will be distributed not only by Walmart but also by popular Mexican department store chain Coppel.
The story broke this morning, and within the first hour of trading FLGC stock has shot up by more than 17%. Despite slipping after this initial spike, it has been quick to rebound and is on the rise again. These gains have put it up an impressive 30% for the week with no reason to suspect that the stock will slow. Despite some turbulence after its early December spike last month, FLGC is still up almost 10% for the month.
Why It Matters
Companies with stories like this have at least a slight advantage in the sense that they are starting off a new year with momentum. While this can fade for some companies, Flora Growth has plenty to be optimistic about. The fact that it has been able to ink a major deal to help one of its leading products gain a footing in international markets shows that the company isn’t just working hard to expand and grow, it’s doing it successfully and quickly. This type of growth should be attractive to investors, particularly as the company still trades at only $2 per share, making it an attractive play for any investors seeking a bullish play on cannabis stocks.
Additionally, the market in which Flora Growth is attempting to secure a share is a booming one. According to Market Data Forecast, “the global CBD skin care market size is estimated to [be] worth USD $1295.7 million by 2026 and $311.3 million in 2021 and is foreseen to garner a [Compound Annual Growth Rate (CAGR)] of about 33% from 2021 to 2026.”
Those would be excellent numbers for a company only concerned with one country. But as recent news has shown, Flora is also focused on gaining a foothold in markets outside the U.S. With every new deal it secures, it moves closer to gaining the market share it seeks and taking its place among its larger and better established peers. Since many such companies are slipping right now, the time is right for Flora to continue its plan of attack.
What It Means
Investors should absolutely be keeping an eye on FLGC stock as the year takes off. This company certainly has potential as the breakout stock of its sector this year.
It’s also worth remembering that FLGC has garnered traction on social media before, and if these growth trends continue, it could certainly do it again. Digital investors like cannabis stocks. Plus, FLGC is still trading a low enough levels to make it an attractive play for all investor circles.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.