Marijuana Stocks in 2019: What the Year Holds for the Pot Industry

Marijuana Stocks in 2019: What the Year Holds for the Pot Industry
iStock.com/Kasynets Olena

Marijuana Stocks in 2019

With the first month of the year nearly through, we’ve had a lot of movement in marijuana stocks in 2019. The start to 2019 has been anything but sleepy, with several major developments portending how the rest of the year is likely to shape up.

Premier pot stocks like Canopy Growth Corp (NYSE:CGC), Aurora Cannabis Inc (NYSE:ACB), and Cronos Group Inc (NASDAQ:CRON) have all grabbed headlines for a variety of reasons—most of them positive.

Their performances over the past month are shown on the chart below: CGC stock in black, ACB stock in blue, and CRON stock in red.

Chart courtesy of StockCharts.com

With that said, let’s get to some of the biggest news stories for marijuana stocks in 2019 so far, and what they mean for the rest of the year.

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U.S. CBD Market

While U.S. marijuana legalization is still more than likely several years out, cannabidiol (CBD) legalization may be much closer at hand.

This is perhaps the most important development for share prices, both in the near and long terms.

With the 2018 Farm Bill now enacted into law, hemp is permissible to farm across the country. CBD, as a result, is more than likely going to be fast-tracked toward federal legalization, since it can be extracted from the hemp plant.

Canopy Growth Corp was quick to jump on this opening in the U.S. marijuana market, saying that it will be pursuing the market aggressively with the new law now in place.

As a result, CGC stock is primed to be among the first major players in the U.S. marijuana stock market that is publicly traded—a huge first-mover advantage that I anticipate will play heavily into the company’s future success.

Several other companies also signaled their intent to enter the market, but I believe that Canopy Growth is the best situated to make those aspirations a reality.

Marijuana Acquisitions

In what is very much a repeat of last year, marijuana acquisitions have been coming in hot and heavy in 2019.

Marijuana stocks in 2019 saw a couple of big acquisitions buys by major players. Aurora Cannabis is particularly known for its aggressive acquisition strategy, and that strategy seems unchanged in 2019, with its recent purchase of Whistler Medical Marijuana Corporation.

Tilray Inc (NASDAQ:TLRY) has also hopped onto the acquisition bandwagon, with its purchase of Natura Naturals Holdings Inc. effectively doubling its supply capacity.

Expect to see a number of high-profile acquisitions in 2019. Although I doubt they will be as large or as expensive as they were in 2018, there’s still a good chance that 2019 could, in the end, outdo last year when it comes to takeovers or cannabis companies.

Global Marijuana Market

While there has yet to be an earth-shaking announcement regarding marijuana legalization in a new country, the wind is definitely blowing toward a global marijuana market.

Between the first-ever feature of the marijuana industry at the World Economic Forum in Davos, and the number of Wall Street firms and analysts doubling down on the potential of pot, we’re seeing a changing world when it comes to pot.

Quickly shedding its former veneer of illicitness and illegality, marijuana is quickly becoming one of the most followed and prized emerging industries  on the planet—and that’s great news for marijuana bulls.

Analyst Take

In January, we saw some major progress being made on a number of fronts for marijuana stocks in 2019.

If this month is anything to go by, expect 2019 to bring in more acquisitions, more global expansion, and potentially the first ever foray of publicly traded, major pot companies into the U.S. market.

All this combined gives 2019 the potential to be the most important year for marijuana yet.