Cannabis is one of the fastest growing emerging markets in the modern world. Global spendings on legal cannabis are expected to hit $31.3 billion in 2022, which is a 230% growth compared to $9.5 billion in 2017, as stated by ArcView Market Research and BDS analysis.
With Canada having legalized the recreational use of cannabis in 2018, and with more U.S. states soon to follow through, the herb may become the apple in the eye of many investors.
The business interest sparking is perfectly understandable.
Today, we’ll shed light on the top 7 marijuana stocks to invest in 2019. We’ll also go over different types of cannabis businesses and what to watch out for when buying your first green stocks.
There are four business segments you can invest in when it comes to cannabis companies:
As with any investment, investors must do a solid background check on their potential bets before buying their stocks. That can be troublesome for businesses trading in the OTC markets, which have fewer transparency regulations for companies.
Don’t be scared by the fact your company is trading on the OTC Markets Group. That doesn’t mean they’re a dubius stock. It only means that it’s the only market they could go to. Given this, there are some promising names in the OTC Markets Group.
And with that being said, there are some not-so-stellar businesses in the NASDAQ trading there, so taking anything at face value takes your approach closer to gambling rather than conscious investing.
Always observe the company’s activity in the industry. Pay attention to the revenue they generate, how they are perceived by customers, other investors and professional analytics, and if they are transparent enough so you’re not suddenly taken aback by a sharp drop in their stock value after some dirty facts about the company emerge on the surface.
Now, let’s take a look at some of the cannabis businesses to invest this year.
The first Canadian marijuana company, Canopy Growth Corp. is the world’s largest publicly-traded weed business. The company owns and runs many brands, making both recreational and medical strains. Tweed, one of the company’s most recognized brand, reported revenue of CAD 77.9 million. In October 2017, Canopy Growth sold a 9.9% stake to Constellation Brands, the beverage giant and owner of Corona beer.
Another large company from the growing sector, Aurora Cannabis broadened their influence spectrum in March by absorbing their rival MedReleaf in a $250 million all-stock deal which was considered the world’s largest cannabis deal ever. Thanks to this consolidation, the new entity will be able to cut costs and improve efficiency. A press release published by Aurora and MedReleaf estimates to produce over 570,000 kilograms of cannabis per year through nine locations in Canada and two in Denmark.
The U.K.-based giant made huge headlines on June 25, 2018, when the FDA approved the first marijuana-derived drug — Epidiolex. The drug was approved for the treatment of two treatment-resistant forms of epilepsy, Dravet syndrome and Lennox-Gastaut syndrome.
Jim Hagedorn, CEO of the lawn care and garden supplies company decided to make a large investment into weed through hydroponics in 2016. In the same year, Forbes published the special edition of their magazine titled “Cannabis Capitalist”, where they featured Hagedorn saying he wanted to push a half billion dollars into hydroponic. That turned out to be a very smart decision, as the company later bought the hydroponic equipment manufacturer Sunlight Supply Inc. for $450 million.
Established in 2010, Kush Bottles oprates in the packaging and supplies business; they even offer branding services to cannabis businesses. The company runs 12 facilities in the U.S. Its revenue for 2018 was valued at $52.07 million, a huge leap from the previous year’s $18.8 million.
This business operates in the real estate segment. The company is dedicated to purchasing and leasing industrial properties for medical marijuana production. It owns real estates in California, Arizona, Minnesota, Pennsylvania, Maryland, and New York. The company’s revenue clocked in at $14.79 million in 2018.
Another company in the weed cultivation industry, Terra Tech operates in the production and dispensing of medical marijuana. Founded almost a decade ago, the business has its own medical marijuana brand (IVXX) and it also runs cultivation activities under the brand name Edible Gardens.
Terra Tech Corp is listed on the OTC market. On top of the above activities, the company also has operations in the U.S., running Blum dispensaries and two large growing facilities in Nevada.
The company’s revenue for the quarter ending March 31, 2018, was reported at $8.6 million.
With so many emerging business on the global market, and the increasing revenue generated by the giants in the industry year by year, the green rush is real and the cannabis market creates ripe opportunities for investors looking to cash in on the rapidly growing industry.
Marijuana stocks can be purchased from the majority of maor brokers. They might be more or less available depending on whether they’re traded on a major exchange market or over-the-counter stocks.
If you’re interested in investing your funds in assets like this, you’ll need to open a brokerage account to buy these stocks.
Do we have any weed traders out there? What are your favorite marijuana stocks?