American Pot Companies Looking to Prosper in New Year
While Canada garnered attention for being the first major economy to legalize recreational marijuana nationwide, let’s be fair: Canada is small potatoes. When looking at the worldwide marijuana market, Canada is a very small segment.
That’s why many pot investors are now focusing on U.S. marijuana stocks. After all, the U.S. market is the largest on the planet, and when the country eventually legalizes pot at the federal level, investors who get in on the ground floor will likely see their investments multiply.
That’s why Vireo Health International Inc (OTCMKTS:VREOF, CNSX:VREO) and Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA) are so attractive.
Before we get to Vireo stock and Curaleaf stock, let’s discuss why 2020 is going to be such a big year for U.S. pot stocks.
Here’s the thing: U.S. federal weed legalization is a certainty. It’s no longer in the realm of if; it’s firmly in the realm of when. But that has been the situation for some time now. What has changed recently is that the “when” is as close as it has ever been.
While political and social support has been building behind marijuana legalization for years in the U.S., it has now reached an important milestone: political endorsements from presidential contenders.
While Barack Obama and Donald Trump were both more of the laissez-faire variety where marijuana is concerned, the new crop of potential presidents are much more gung-ho about seeing pot legal across all 50 states.
Many of the Democratic Party presidential candidates (with a few notable exceptions) back total legalization of marijuana. Bernie Sanders especially has been adamant in his support for legalization.
Now, there’s no guarantee that the Democrats will win the next presidential election. And even if they do win, there’s no guarantee that the president will keep their word or even be pro-pot in the first place (Joe Biden, for instance, is against legalization).
But this is by far the closest the U.S. has ever come to federal legalization. It’s a very real possibility that we’ll see major steps forward in 2020.
Here’s what’s almost certain: U.S. marijuana legalization will not come in 2020. Unless President Trump decides to surprise everyone with a radical policy shift (not exactly out of character for him, but still unlikely), then we won’t see marijuana legalization from the current administration.
But the election campaign will begin in earnest in 2020 and conclude late in the year. So in January 2021, we could have a pro-legalization president. You can just imagine how much that would juice U.S. marijuana stocks.
Think of how great it was for Canadian marijuana stocks during the lead-up to legalization in that country. Shares of cannabis companies soared by hundreds of percentages over a few years.
That’s likely going to happen again when the U.S. eventually announces that it will be federally legalizing weed.
And the worst-case scenario isn’t even all that bad. If Trump or another anti-pot president is in power, at worst that will only delay marijuana legalization.
And as we’re seeing right now, there are many companies able to profit from the legal marijuana markets currently in play.
Consider that California is the largest marijuana market on Earth, dwarfing Canada. Add in the 10 other U.S. states and D.C. that have legalized recreational marijuana and you have plenty of consumers from which to massively profit.
And with that, let’s get to the two U.S. pot stocks best positioned to take advantage of the weed stock rush that’s coming.
VREOF Stock & CURLF Stock Excite Investors
In my opinion, the two top U.S. marijuana stocks are Vireo stock and Curaleaf stock.
Chart courtesy of StockCharts.com
As can be seen in the above chart, CURLF stock in particular has been doing well lately.
What makes Curaleaf Holdings Inc special is its size; it’s the largest U.S. pot company in the world. On top of that, in 2020, Curaleaf is hoping to become the first marijuana company to hit $1.0 billion in profits. (Source: “Cannabis Canada: Will Curaleaf be the first pot company to report US$1B in sales?,” BNN Bloomberg, August 28, 2019.)
That’s $1.0 billion without federal legalization in the United States; imagine how much sweeter that number could be once legalization arrives.
Curaleaf, which has operations in 12 U.S. states, recently launched another cannabis dispensary. The Port Charlotte, Florida location is the 49th dispensary that Curaleaf opened in the U.S., and the 26th that it opened in Florida. (Source: “Curaleaf Opens Port Charlotte’s Largest Medical Cannabis Center,” Curaleaf Holdings Inc, September 3, 2019.)
So while the company waits for recreational marijuana to be legalized across the country, it’s also taking advantage of the expanded U.S. medical marijuana market (33 states and D.C.).
With all that in mind, there’s no reason to think that Curaleaf stock has finished rising. In fact, CURLF shares are up about 20% year-to-date, outperforming many of its competitors.
Another U.S. marijuana stock of note is VREOF stock, although for entirely different reasons.
Vireo stock is a much smaller marijuana penny stock that has nowhere near the heft of Curaleaf. In fact, Vireo only operates in the medical marijuana space, making it a little less sexy than CURLF stock in the eyes of many investors.
So why am I discussing it here? Simple: Bruce Linton.
Linton was the founder and CEO of Canopy Growth Corp (NYSE:CGC), the largest marijuana company by market cap.
Linton’s track record of building a marijuana giant out of dreams is well documented. He took a defunct, small-town Hershey Co (NYSE:HSY) factory and turned it into a global marijuana empire before his departure.
Now he’s looking to do the same with the marijuana penny stock Vireo. If he can do even a rough imitation of what he did with Canopy, then VREOF investors could see their portfolios swell in value.
“This is a science-backed marijuana company that met my criteria for best practices and a valid methodology,” said Linton when he joined Vireo as executive chairman. (Source: “Ex-Canopy CEO Bruce Linton joins U.S. cannabis company Vireo Health,” MarketWatch, November 11, 2019.)
“This struck me as a company doing a lot of good work that nobody knows about.”
By bringing his resources and name recognition to Vireo, Linton instantly made the company a must-watch marijuana penny stock. That the company operates in the U.S. is even better.
Of course, one man isn’t going to change the company overnight, and investors will need a fair amount of caution when dealing with an otherwise little-known marijuana penny stock.
But the Linton boost is a very real thing. His connections in the cannabis industry are unparalleled, and his name recognition will be able to open a good many doors that otherwise would have been closed to Vireo Health International Inc.
As such, Vireo stock is riskier than Curaleaf stock, since it simply does not have the financial strength of the latter. But at the same time, Vireo’s small size and big potential give its share price a higher potential ceiling.
That said, both CURLF and VREOF are very exciting U.S. pot stocks that are likely to see big moves in 2020
We won’t see marijuana legalization in the U.S. by 2021. But what we may see is a huge push toward legalization, or at least some legislation that could lead us down that path.
What we’ll definitely see in the next few years is the legal cannabis market continue to expand and mature across the country, leading to gains for U.S. marijuana stocks.
As mentioned before, the marijuana sector is full of potential and excitement. It has only begun to show its true strength. As the global pot trade expands, we’re going to see more gains come to companies that get in early and stake out important claims in lucrative markets. And there is no market more lucrative than the United States.
With that in mind, 2020 is going to bring big moves for the U.S. marijuana industry. U.S. pot stocks like Curaleaf stock and Vireo stock are in extremely strong positions to take advantage of that growth.