According to Arcview Market Research and BDS Analytics, the legal cannabis industry is expected to grow 230% by the year 2022, with most of it ($23.4 billion) being spent in the United States. Moreover, the United States Marijuana Index grew to a whopping $120 in May 2010 from only $91 at the beginning of the year. These compelling figures create great investment opportunities as well as awesome cannabis news for marijuana enthusiasts.
Brief history of marijuana stocks in the U.S
Nasdaq and the New York Stock Exchange (NYSE) both made their first listing for cannabis stocks in 2018. The first legal cannabis company to make its stock exchange debut was Canopy Growth Corp. which was listed on the NYSE of the same year. Although a lot of cannabis companies are traded through over-the-counter markets as penny stocks, there are still many lucrative investment opportunities involving cannabis stocks publicly traded on stock exchanges.
Like many traditional investments, investors must do their homework on the companies they plan on investing in. Fortunately, this process is a lot easier to do with publicly-traded cannabis stocks than cannabis stocks traded on over-the-counter markets with little to no transparency and less disclosure requirements. For example, a pharmaceutical company listed on the Nasdaq stock exchange known as INSYS Therapeutics took a huge loss in October 2017 when their executives were charged with offering kickbacks for doctors to prescribe fentanyl-based drugs. Another notable example is a Canadian company known as The Green Organic Dutchman Holdings which saw its share value fall 36.7% in 2018.
Why you should invest in cannabis stocks
Many financial experts predict the U.S cannabis stock market exceeding $22 billion dollars by the year 2022. And besides the fact that the cannabis industry offers very lucrative investment opportunities (as many industries do), there are not many industries that are expected to increase more than three times its size in only the next five years or less.
There are currently 30 U.S states that that have legalized medical marijuana, and eight if these 30 states have also legalized the use of recreational marijuana. There should be more states legalizing marijuana use in the near future, with many other states considering legalization including Oklahoma recently voting on legislation to do so.
The widespread legalization of marijuana has created a very profitable industry. For example, Colorado opened its recreational marijuana market in 2014 and saw a 134% growth in the past five years. Many business have been created to get involved with this booming industry in many different ways, from cultivation to retail and distribution. The liquid growth potential offered by the legal cannabis industry is one of the main reasons they are starting to invest in it.
Top cannabis stocks to buy in 2019
Many U.S states and businesses have already began to benefit from the profitability of the legal cannabis industry, however,it is also profitable for private investors as well. Here’s a list of some of the best cannabis stocks you should buy in 2019.
1. Canopy Growth Corp. (CGC)
Canopy Growth Corporation, the most publicly-traded cannabis company in the world, was the first marijuana company to form in Canada. In April 2019, it became the biggest cannabis company in the world by market capitalization and share value. Canopy Growth Corp. was also the first licensed and regulated cannabis producer in the entire North American region. The company also owns many subsidiary brands that produce both medical and recreational marijuana. In 2019, Canopy Growth Corp. reported an annual revenue of almost $60 million.
By October 2018, their market capitalization grew to $14 billion and their chief executive Bruce Linton was named CEO of the year in 2018 by the Ottawa Board of Trade. What also makes Canopy a very profitable company for investors us the fact that their business operations extend past the North American region, with business partnership agreements in Spain with a pharmaceutical company known as Alcaliber S.A, ownership of a subsidiary company in Germany that imports Medical cannabis and other business ventures in Jamaica, Brazil and Chile.
2. Cronos Group Inc. (CRON)
Cronos Group, a Toronto-based legal marijuana company, was Nasdaq’s first cannabis stock. They generated $7.3 million in revenue for the fiscal year of 2018. Crono’s also operates in many international regions outside of North America, which includes Germany, a facility currently being built in Israel and a joint venture partnership in Australia.
Cronos is a great cannabis stock option for investors because it is a global and diversified group with operations in five continents. This includes two fully-owned cannabis-producing companies in Canada: Peace Naturals Project Inc., the first company to receive a non-incumbent cannabis license from Health Canada, and Original BC Ltd. in Okanagan Valley, British Columbia. Cronos Group is fully committed to remaining an industry leader and rapidly expanding its business operations across the globe.
3. Terra Tech Corp. (TRTC)
Terra Tech is an agricultural company which operates in the production of medical marijuana. If you are looking for a cannabis stock with solid ROI potential to invest in, Terra Tech Corp. is a great option. The expected ROI from investing in this company is about 371.25% in a five-year period. With a $100 investment in this company, you can potentially see your investment rise to $400 or more by the year 2024.
What makes this company highly profitable is the fact that Terra Tech Corp. is not a company that only focuses on cannabis; they manufacture, market, and sell agriculture products for growers and consumers of many different plant crops. They provide their products to horticulture enthusiasts, commercial companies, local farmers, and ordinary crop growers through a network of retailers based in the United States.
4. KushCo Holdings (KSHB)
KushCo Holdings is a marijuana packaging and marketing company based in Garden Grove, CA. They operate 12 facilities across the United States with a reported revenue of $52.7 million in 2018 – a huge step forward from the $18.8 million in revenue they made in 2017.
KushCo Holdings is the parent company of a very diverse group of organizations operating in cannabis, CDB and other industries that are similar to, or related to cannabis. Their brands include Kush Supply Co., which is the largest producer of vaporizer products in the United States. They also produce many packaging supplies and accessories, as well as Kush Energy, a well-known provider of hydrocarbon gases.
5. Aurora Cannabis Inc. (ACB)
Aurora Cannabis Inc. is a Canadian-based cannabis company that participates in the distribution and production of medical cannabis. They are one of the biggest cannabis companies in Canada, with trading activity in the Canadian venture stock exchange TSX as well as the New York Stock Exchange (NYSE).
Aurora Cannabis Inc. super-sized its network by acquiring MedReleaf for $250 million, a transaction that is known today as the world’s largest marijuana deal to ever take place. Aurora Cannabis Inc. is also one of the largest cannabis producers in the world, producing over 570,000 kilograms if cannabis from its nine facilities in Canada and its two facilities in Denmark.
The legal cannabis industry has very high growth potential, but some companies are in a much better position to become more profitable than others. The most important things you should do before investing in a cannabis stock is to check the track record of their executive and management team and look for consistent positive growth in the share value and net revenue of the company you are interested in. Make sure you do a thorough examination of the executive and financial background of the companies you plan on investing in before risking your money on them.