3 Top Marijuana Stocks to Watch in May

Marijuana stocks, for the most part, have been outstanding growth vehicles for investors this year. Despite Canada's raging battle with black-market sales and the high level of uncertainty surrounding America's future policy on the drug, investors have been piling into these stocks with abandon in 2019.

So, which pot stocks should investors be keeping tabs on in May? Our Motley Fool contributors think HEXO Corp. (NYSEMKT: HEXO), Aurora Cannabis (NYSE: ACB), and Canopy Growth Corporation (NYSE: CGC) are three top names in the space worth watching this month. Here's a brief rundown for each stock.

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A test case

George Budwell (HEXO Corp.): Canada's HEXO Corp. is the pot stock that has my undivided attention this month. After uplisting to the New York Stock Exchange and subsequently acquiring Newstrike Brands to boost its annual production capacity to a noteworthy 150,000 kilograms per year, HEXO has quietly transformed into one of the hottest pot stocks in the market. The company's shares, in fact, have gained an eye-popping 125% since the start of the year.

Why does HEXO's red-hot momentum matter? Two reasons. First up, stocks in general tend to go into a slumber from May to October. So it'll be interesting to see if HEXO's shares follow this traditional seasonal downturn. If they do, investors can probably expect a slow summer across the entire industry. After all, HEXO still sports the second-most-compelling valuation across the space -- even after its blistering start to the year.

The second reason is that HEXO has a number of major catalysts coming up in the back half of the year. Not only is HEXO's top-line forecast to grow exponentially over the remainder of the year, but the company's joint venture with Molson Coors Brewing -- called Truss -- to develop cannabis-infused beverages should become operational around October of this year. HEXO and Molson plan on being among the first to offer cannabis-infused beverages in Canada once this high-value market segment opens up later this year.

This highly anticipated catalyst should -- in theory, at least -- keep investors engaged during the summer doldrums, perhaps pushing HEXO's shares to new highs. Time will tell.

Too much buzz to ignore

Keith Speights (Aurora Cannabis): I can't think of a marijuana stock to watch in May that's more intriguing than Aurora Cannabis. There's simply too much buzz about this Canadian cannabis producer for investors to ignore.

Analysts are heaping their praises on Aurora. The company recently became one of three winners to receive a cultivation license for medical cannabis in Germany. (To put this accomplishment in perspective, 79 companies were vying for the honor.) Aurora is well on its way to building an annual production capacity of over 625,000 kilograms -- more than any other marijuana producer.

I'm most interested in watching Aurora, though, because it's actively hunting for big partners. So far, Aurora has been left in the dust by several of its peers on this front, including Canopy Growth, Cronos Group, HEXO, and Tilray. However, that could change in the near future.

In March, Aurora announced that billionaire investor Nelson Peltz was teaming up with the company as a strategic advisor. Peltz's No. 1 job is to find partners for the company in industries that could be disrupted by cannabis -- think beverages, cosmetics, pharmaceuticals, and wellness products.