Times have certainly changed. With marijuana stocks now all the rage, investors have another sector to add to the “sin stock” category. While the idea of investing in marijuana stocks in 2015 may be novel, the pay-off for many medical marijuana stocks has gone up in smoke. Having said that, below are five of the best marijuana stocks to watch in 2015.
Marijuana Stocks Burning Fast
Over the last two years, the S&P 500 has increased more than 45%. Most of the charts of marijuana stocks I hunted down (80+) looked like someone jumped off a high diving board. Some have flat-lined, and only a few looked really promising. One big point I noticed: none of those were pure marijuana plays.
On top of that, most marijuana stocks are firmly entrenched in penny stock territory and trade on the OTCBB (Over-the-Counter Bulletin Board). That means they are illiquid, thinly traded, and highly volatile—not the best technicals when it comes to investing.
Because the vast, vast majority are traded over the counter, they are not as regulated as stocks listed on the NASDAQ, NYSE, TSX, or virtually any stock market in the free world. Some marijuana stocks lack professional management, a board of directors, or proper financial controls.
However, if you’re interested in investing in marijuana stocks, you really need to do your due diligence. That is if fundamentals like cash flow and earnings mean anything to you.
In the end, it may be worth the effort to put some medical marijuana stocks on your radar. Some predict the legal marijuana market could reach $150 billion to $200 billion. That’s almost as big as the U.S. market for prescription drugs.
Plus, the widening legalization of cannabis is driving the positive long-term outlook for marijuana. Colorado, Washington, Oregon, and Alaska have already legalized marijuana; the list could get more crowded if voters approve initiatives in Nevada, California, Arizona, Maine, and Massachusetts. On top of that, medical marijuana is legal in 23 states.
Top 5 Marijuana Stocks to Watch in 2015
GW Pharmaceuticals plc (NASDAQ/GWPH)
Not a pure-play marijuana stock, GW Pharmaceuticals is one of the top marijuana-related stocks to watch in 2015. The company uses the active ingredients in cannabis to develop cannabinoid medicines, including “Sativex” for the treatment of MS and cancer pain, and “Epidiolex” for the treatment of childhood epilepsy.
The company has a market cap of $1.90 billion, total cash of $232 million, and total debt of $2.79 million. The company’s share price is up more than 120% since the beginning of 2014 and is up 41% since the beginning of 2015.
American Cannabis Company, Inc. (OTCBB/AMMJ)
American Cannabis Company, Inc. owns and operates two businesses: American Cannabis Consulting and The Trade Winds Inc. American Cannabis is the leading consulting agency for those seeking to enter the highly competitive and rapidly expanding regulated commercial cannabis industry. The Trade Winds supplies products and equipment to businesses, including soil and lights.
In November, American Cannabis announced its first quarterly net income as a public company. The company reported third-quarter net income of $75,000 on $482,000 of gross revenue. The company’s deferred revenue also grew to $184,000, up from $11,000 at the start of 2014. (Source: American Cannabis Company, Inc., November 18, 2014.)
mCig, Inc. (OTCBB/MCIG)
Beverly Hills-based mCig, Inc. manufactures electronic cigarettes and vaporizers (for leaf, wax, and liquids) under the mCig and VitaCig brand names in the United States. As the name implies, their products allow users to inhale the vaporized products (marijuana or cigarettes) rather than lung-damaging smoke.
In February, the company announced its entry into the worldwide CBD (cannabidiol) hemp oil market and the launch of its CBD product line; the products are 100% legal in all 50 states and over 40 countries. (Source: mCig, Inc. February 20, 2015.)
In March, mCig announced an initial CBD product order worth more than $1.2 million and announced it is finalizing a nationwide wholesale agreement with two large national distributors to supply these high-demand CBD products to more than 1,000 retail store locations. (Source: mCig, Inc., March 5, 2015.)
Surna, Inc. (OTCBB/SRNA)
Investors in Surna, Inc. cannot be pleased with the performance of the company’s share price, what with losing 97% of its value—but things could be looking up for Surna.
The company manufactures equipment for the legal cannabis industry, with a focus on high-energy usage. In April 2014, the company acquired Hydro Innovations, a leading designer, manufacturer, and distributor of state-of-the-art indoor climate control systems, such as chillers, lights, reflectors, and irrigation systems designed for cannabis and other indoor agriculture markets. (Source: Surna, Inc., April 1, 2014.)
In January, it announced plans to acquire controlling interest in Agrisoft Development Group, a privately held company that is one of the leading software developers of seed-to-sale tracking systems for state-regulated cannabis cultivation and distribution companies. (Source: Surna, Inc., January 8, 2015.)
Vape Holdings, Inc. (OTCBB/VAPE)
Vape Holdings, Inc. designs various vaporizing products, offering medical- and food-grade ceramic products primarily under the HIVE Ceramics brand throughout North and South America and Europe. The company also intends to offer packaging and sourcing products under the HIVE Supply brand name.
For the first quarter (ended December 31, 2014), the company reported revenue of $386,643 and net income of $582,910, or $0.05 per share. These results have no year-over-year comparison, as Vape recorded nominal business operations in 2013. (Source: Vape, Inc., February 17, 2015.)
For the fiscal year (ended September 30, 2014), the company reported revenue of $841,724, the company’s first revenue-generating year. For its fiscal fourth quarter, Vape reported record quarterly revenues of $449,184. (Source: Vape, Inc., December 30, 2014.)
In December, the company closed on a $500,000 investment with a single institutional accredited investor. In addition to helping accelerate the company’s core business, the capital will be used to help launch its newest line of products, HIVE Glass. (Source: Vape, Inc., December 8, 2014.)
Are these the best marijuana stocks in 2015? I’m not so sure they’re the top marijuana stocks, but they are five of the more interesting ones to keep an eye on.