Cannabidiol (CBD Oil) Market Size
When it comes to the marijuana market, it’s easy to lose sight of all the ancillary industries that crop up outside the scope of pot. For instance, cannabidiol (CBD), a primary extract from the cannabis plant—and the oil derived from the chemical—are part of an industry that is set to explode over the next few years.
With that in mind, let’s take a look at some of the best CBD oil stocks in 2018.
First, in order to understand what is so enticing about the global CBD oil market—and therefore, cannabidiol stocks—you have to examine just how much potential there is for growth among this sub-sector of the industry.
According to recent CBD market analysis reported by Forbes, the market is forecasted to increase by 700% by 2020. Another study on CBD market growth, by Hemp Business Journal, estimates that the sector will reach $2.1 billion by 2020, which would be an enormous rise from the $202.0 million in 2016. (Source: “Pot Stocks Gearing Up for Strong 2018 as Cannabis CBD Frenzy Intensifies,” Cision, December 12, 2017.)
These estimates and other similarly rosy projections are driving a number of cannabidiol stocks to shoot through the roof.
With medical marijuana continuing to grow as it gained acceptance among a number of countries around the world, the global CBD oil market is likely to follow suit. Laws that legalize marijuana almost always legalize CBD oil as well.
Best CBD Oil Stocks in 2018
With the market expected to grow exponentially in the next few years, cannabidiol stocks are some of the hottest in the marijuana market.
The best CBD oil stocks in 2018 are not solely focused on cannabis oil, mind you. The companies also trade in medical marijuana. Further, they are all Canadian companies, which means that they will also have the opportunity to ply their wares in the recreational market when legalization hits sometime this summer.
With the preamble out of the way, let’s first start with one of the strongest performers in the marijuana market so far in 2018, CanniMed Therapeutics Inc (OTCMKTS:CMMDF, TSE:CMED).
1. Cannimed Therapeutics (OTCMKTS:CMMDF, TSE:CMED)
CanniMed is a licensed provider of medical marijuana, with a focus on providing CBD oil-based products.
But what really makes CanniMed special—and why marijuana market enthusiasts ought to keep the company on their radar—is that, while much of the industry has seen a downturn in 2018, CanniMed has enjoyed a very strong start this year.
Chart courtesy of StockCharts.com
CanniMed stock is up over 78% in the past three months and continues to climb. While those sorts of gains aren’t uncommon in the marijuana market, through the first three months of 2018, that was certainly an outlier. Most marijuana companies have had languid starts this year, with some even seeing steep drops in value as the industry experiences a market correction.
CanniMed has a market cap of almost $683.0 million, putting it firmly in the upper-mid range of marijuana companies.
As a result of its size and its attractive growth, CanniMed was the target of a long acquisition courting process by Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB), which even involved an attempted hostile takeover.
But the conclusion was that Aurora would be acquiring CanniMed, combining to form one of the largest companies in the cannabis industry. Both companies were strong individually, so a partnership between the two will likely encourage the stock value to rise.
The combination of the two companies’ strong presence in the CBD oil market will help separate them from the pack.
That makes both ACBFF stock and CMMDF stock solid picks for those looking to enter the CBD oil market.
A final addition to this list is one that carries with it a little more risk, but, for those willing to swing for the fences, Aphria Inc (OTCMKTS:APHQF, TSE:APH) may be one of the sweet options right now.
2. Aphria Inc (OTCMKTS:APHQF, TSE:APH)
Aphria, a major trader of cannabis oil, is among the top companies in the industry.
Like the two stocks mentioned previously, Aphria is based in Canada, which means that it is poised to receive a nice boost to its stock value when legalization rolls around this summer. Not to mention, Aphria is due for a more substantial recovery than most cannabis stocks, but only because it has been one of the biggest losers during the correction so far.
And therein lies the risk-and-reward balance that APH stock entails.
While a good number of marijuana stocks have struggled in 2018 to see strong price gains, with many of them either showing small losses or meager gains at best, Aphria has had a tough go of it.
Aphria’s stock price has dropped 16% over the past three months, which has reduced its overall gains over the past six months to roughly 85%.
Now you may be thinking, 85% growth in six months is fantastic by any measure (and you’re right), in the context of the marijuana market, that is actually not all that spectacular, considering that the last quarter of 2017 saw a massive bull run take place in the marijuana industry.
Chart courtesy of StockCharts.com
Consider that rivals are showing triple-digit gains, with some going as high as 200% or 300% over that same time period, and that’s with the worst part of the correction.
So, Aphria has not been the best performer as of late. That’s the risk part.
The reward part is that the company’s lowered value may make it an appropriate target for investment, if only to fulfill that old adage “buy low and sell high.”
APHQF stock is indeed low right now and, as such, it may turn out to be one of the better picks now because of its decreased value.
I strongly believe that a firm recovery is in store for APHQF stock. The question comes down to whether that recovery will outpace other marijuana stocks to make the investment worth the risk.
At this point, I believe that Aphria is a good pick, but not a great pick. I think there’s still room for the stock to fall, but, ultimately, a bottom will be reached. From there, I see it being one of the stronger marijuana stocks, at its reduced price.
My advice is to watch Aphria stock and wait until a consistent upward momentum begins to build and get in early on that climb. The summit, I project, will be higher than most.
For those looking to play the best CBD oil stocks in 2018, there’s little reason to outright avoid Aphria stock. I think a strong recovery will take place. The only question is the degree of that strength and—most importantly—how well the stock will perform in comparison to other red-hot cannabidiol stocks.
With so many different plays available in the marijuana market, from companies that focus solely on medical development to Canadian stocks gearing up for legal recreational cannabis sales this summer, cannabidiol stocks offer yet another way for investors to take advantage of what is one of the most exciting emerging industries around.
In fact, if you consider that the cryptocurrency market has hit a snag recently, with its massive downturn and a tapering of expectations (you’ll see fewer six-figure projections for Bitcoin by the end of 2018 these days), the marijuana market and all that it encompasses is arguably the most appealing sector for massive returns in both short-term and long-term projections.
So it pays to do your research and find out which products are the most well-situated to take advantage of emerging trends.
The best CBD oil stocks in 2018 are ones that are poised to take advantage of general market trends (like legalization) and more specific movements within the cannabidiol market, which is set to explode in the coming years.
While you may think of weed purely from a smoking perspective, CBD oil proves that this is a rather blinkered view of the marijuana industry. There are many companies that are making products beyond bud, from vaporizers to oils to hemp-related products, and they are all likely to rise alongside the marijuana market.
Savvy investors will search out the best products and be sure to have them covered in their portfolios.