The reason why Marijuana stocks are a very good investment opportunity is twofold. First – and this is probably the reason you ended up here – the marijuana stock market is getting more mature. The first companies in the market have been around for quite some years now and start to lose their start-up attitude. This makes the marijuana stock market as a whole somewhat more reliable to invest in.
Second, as you have undoubtedly noticed, more and more states in the United States are approving legalized weed and medical marijuana or are on the verge of approving it. In addition, Canada has legalized weed completely and by doing so opened up a large stock market. As support for legalizing pot for medicinal and recreational purposes is gaining momentum, investing in this market could be very beneficial. The combination of these two factors makes sure that the more established companies in the marketplace are looking at an opportunity to hugely increase their geographical presence and thus increase their revenue and profits significantly. But it also increases chances for the successful entry of newcomers in the marketplace.
And the beauty of it is; unlike other stock markets the marijuana stock market as a whole is growing significantly. The pace at which the market is growing has already attracted lots of investors. But most interesting is not what the legal market already entails. It is the illicit market that is worth considering when deciding whether you should invest in the marijuana business. By most estimations, $46 billion of sales were conducted on the black market. That is the true market potential when more states will come to legalize the drug and federal laws will hopefully this wave of legalization.
This article focuses on the current global weed market and divides this market into the U.S. weed stock market and the Canadian weed stock market. Both markets will be analyzed and in addition compared to each other. Based on both current markets the most interesting marijuana stocks will be presented and described.
- 1 U.S. Marijuana Stocks
- 2 Canadian Marijuana Stocks
- 3 Cannabis Stock Indices
- 4 Hemp Stocks – an exciting opportunity
Marijuana’s Market Size
The overall Cannabis market size in the U.S. in 2016 was estimated to be around 7 billion in the United States alone. The global legal marijuana market is expected to reach USD 146.4 billion by end of 2025. Medical marijuana is going to be the largest segment and estimated to be valued at USD 100.03 billion by 2025. When it came to product categories, the market size for buds is estimated to be the biggest and valued at USD $82.9 billion by 2025.
Some players operating in legal marijuana market are Canopy Growth Corporation, Aphria, Inc., Aurora Cannabis, Maricann Group, Inc., Tilray, The Cronos Group, Organigram Holdings, Inc, ABcann Medicinals, Inc., and Tikun Olam of which you can find an in-depth Cannabis Stock Analysis below.
U.S. Marijuana Stocks
With the U.S. weed market opening up by the expanding legalization of weed in different states the market will continue to grow. BDS Analytics estimates that the U.S. will eventually gain 80% of the global weed market due to the expanding globalization and the till now large black market that is already present. The image below shows the current state of legalization as explained below.
Dark green: Legal
Light green: Legal for medical use
Dark grey: Legal for medical use with a limited THC content
Grey: Prohibited for any use
Red D: Decriminalized notes (includes laws which have not yet gone into effect)
If we then, based on the laws and regulations, have a look at the data regarding the current size of the U.S. weed market we can see it has not yet overwhelmed the vastness of the Canadian weed market. With sight on the current trends and developments, we can conclude that this offers a lot of opportunities for highly profitable investments. As many companies have not yet reached their maturity phase the chances of great stock growth are higher in comparison with the more mature Canadian marijuana stocks.
When we have a look at the largest marijuana stocks in the U.S. market we can, among other things, see two things. First, we can see the stocks that have the largest market share. This tells us the companies behind them definitely have the experience and know-how to build up their brand and maintain a leading position on the market. Second, we can see marijuana stocks that don’t have a very large market share but do have attractive growth figures. This tells us that these companies are likely to take more well-considered risks and devote more assets to being innovative.
Both categories of stocks are interesting for different reasons. Therefore we have selected the most appealing marijuana stocks from both worlds and described them for you in the next paragraphs.
GW Pharmaceuticals Plc
GW Pharmaceuticals was founded in 1998 by Dr. Geoffrey and Dr. Brian Whittle with the goal of using the healing cannabinoids found in Cannabis for therapeutic purposes. Their lead product right now is a liquid formulation of highly purified CBD. This product is used as a medicine for the treatment of multiple diseases like Lennox-Gastout syndrome. based in the U.S. and U.K. Gw pharmaceuticals strives to maintain a world-leading position in the field of cannabinoid science and research.
Origin house, the brand name of Cannaroyalty corp. operates in California as an investment firm in weed dispensaries and brands. With their vast distribution network, they bring over 50 differents marijuana brands to more than 400 retailers all over California. Their main goal is to detect upcoming and promising marijuana brands and use their experience and network to build these brands into maturity. In addition, when new markets open up due to legalization they have built an enormous amount of knowledge to expand and go global.
Green Thumb Industries Inc
Green thumb Industries is based in Chicago and specializes in providing dignified access to safe and effective cannabis. With 9 manufacturing facilities and 72 retail locations, their goal is to give back to the communities they serve. In order to serve this goal, they donated to, and led, numerous organizations that support those who need it the most.
Curaleaf Holdings Inc.
Operating in 12 different states in the U.S., Curaleaf Holdings serves over one hundred thousand patients that benefit from medical marijuana. With 12 cultivation sites and 35 local dispensaries, they strive to be the industry’s leading resource in education and advancement through research and advocacy. Divided into two brands, Curaleaf sells everything ranging from flowers, and pre-rolls till capsules and lotions. While “Curaleaf Hemp” produces all kinds of CBD products “UKU Craft Cannabis” produces products with THC as well in them.
Founded in 2016, Innovative Industrial Properties became the first real estate investment trust for the medical marijuana industry. Their main goal is to provide real estate capital for medical marijuana growers. They achieve this by combining the capital of many investors to acquire income-producing real estate specialized for cultivating marijuana. Their focus is to partner up with well-capitalized, experienced medical marijuana growers and generate profit for their investors. With ten industrial buildings specialized for cultivating marijuana, they are active in eight different states.
Canadian Marijuana Stocks
As discussed earlier, the data for the Canadian Marijuana market shows that at this moment the market is very big. However, the maturity of this market is further developed in contrast to the U.S. Marijuana market. This is mainly caused by the more progressive laws and regulations of Canada.
Although the Canadian Marijuana market has become more stable and mature this doesn’t mean there are no outliers anymore with great growth potential. The data provided by The Marijuana Index shows which stocks have the largest market share and the stocks that have been doing very well recently. In addition, it’s likely to assume that the stocks with the largest market share have the most stability as they survived the impetuous growth phase of their company. This translates to a stock that has great stability but on the other hand, has less high profits.
After analyzing the current Canadian stock market, we have selected the most interesting weed stocks for you to invest in. This selection is divided once again into the large stable market leaders and the potential growth stocks with potential larger profits.
Tilray Inc. Stock
Tilray, Inc. engages in the research, cultivation, production, and distribution of medical cannabis and cannabinoids. Its products include dried cannabis and cannabis extracts. The company was founded only recently on January 24, 2018 and is headquartered in Nanaimo, Canada.
Cronos Group Inc. Stock
Founded in 2012, Cronos Group Inc. is an investment firm that invests in companies that produce medical marijuana. They are based in Toronto Canada and invested in Peacenaturals, OGBC, WMMC. All three companies are specialized in the production of medical marijuana. They are driven to change to the negative conception of marijuana and help their patients by producing the best quality medical marijuana.
Hexo Corp. is a cannabis producer based in Toronto, Canada. Initially founded in 2013 as Hydropothecary, the company eventually turned into Hexo corp. as they felt the need to further expand their business. Nowadays the company is divided into two brands: HEXO and Hydropothecary. While HEXO serves the adult-use purposes, Hydropothecary meets the needs of the medical marijuana market. With 310K square feet of production capacity and another 1000K square feet under construction, they strive to be a leading marijuana producer.
Aurora Cannabis Stock
Based in Canada, Aurora Cannabis has been growing high-quality medical Marijuana since 2016. Grown in their state of the art facility in Cremona, Alberta, they produce a comprehensive range of different marijuana strains. Through an online delivery system, Aurora Cannabis makes sure that their patients can benefit from their product even when they are less mobile than the average person.
Canopy Growth Corp. Stocks
In 2014 the first cannabis company to be publicly traded, they are the only company to be a member of a major global stock market index (the S&P/TSX composite index). Canopy Growth is dedicated to corporate social responsibility especially with the upcoming legalization of recreational marijuana. Therefore they invest a lot of time and money in foundations that promote education and responsible use of marijuana.
Aphria Inc. is a producer of medical marijuana, based in Leamington, Canada and was founded in 2014. Their two main products are different strains of flower and cannabis oil. They strive to provide their patients with the cleanest and safe marijuana products available on the market. They achieve this goal by growing their marijuana in an all natural greenhouse grown with natural sunlight. In addition to this Aphria follows a strict quality management process which includes an astonishing 509 steps.
Cannabis Stock Indices
A stock index is used to describe the performance of the stock market or a portion of it, and to compare returns of investments. An index uses a weighted average of stock prices, so larger companies count more in the calculation. Marijuana Stocks also have their own stock indexes with different guidelines and requirements companies must meet. Below the biggest Cannabis Stock Indexes explained.
North American Marijuana Index (NAMI)
The NAMI tracks leading stocks in the legal cannabis industry in the United States and Canada. The North American Marijuana Index is broken down by 2 sub-indices: The U.S. Marijuana Index and the Canadian Marijuana Index. To be included, companies must meet minimum trading requirements. They must have a market capitalization of $80 million, daily trading volume of $2 million and a share price of at least $1.00.
Global Cannabis Stock Index (GCSI)
GCSI has been in existence since 2013 and they represent the overall publicly traded market for the medical and legal marijuana sector. There are 61 cannabis-related companies listed on the index which is rebalanced every quarter. Canadian and Australian companies must have a U.S. listing in order to be included in the index.
The Green Market Report Index
This is the newest of the cannabis indices. The Green Market Report Index officially launched January 31, 2018. This index consists of 30 stocks selected based on market capitalization, revenue production, plus high standards of company operations. They focus solely on pure cannabis companies with a rebalance review each quarter.
Hemp Stocks – an exciting o
Investing in marijuana stocks has become increasingly interesting and more accepted in the financial world. While the Canadian weed market is ahead of the U.S. weed market both are interesting to invest in. Due to more progressive laws and regulations, the Canadian market is more mature and currently the biggest market with stable companies on top. While the U.S. market is currently less than half the size of the Canadian market, experts suggest that the market will eventually gain 80% of the global weed market.
Investing in multiple stocks, divided over two different markets you can spread your risks. While spreading the risks you can, on the one hand, invest in more mature stable Marijana stocks, and on the other hand, invest in weed stocks that are still in the growth phase and are more likely to have higher profits. If you got excited and really want to start investing in marijuana stocks we highly recommend this book. This book is perfect for beginners and will show all the possibilities for great profits to earn in 2019!
Hey guys! My name is Anthony Ellsworth and I am passionate about nature and everything it has to offer. Since I was still a kid I always felt a strong connection with nature and the urge to explore. This passion has led me to study biology later on in life and lots of exploring. Now, together with my beautiful wife Jennifer, it has become our goal to share all the knowledge that we have built up together through the years. If you have any questions or what so ever feel free to ask them anytime!