Marijuana Industry Growth
When people think of marijuana, they typically think of the classic rolled joint that has been a pop culture staple for decades.
But when it comes to the marijuana industry, the growing popularity and legality of the drug has fueled an explosion in how one can enjoy pot and for what purposes. As a result, the industry has expanded far beyond just the recreational marijuana market.
Investors, therefore, shouldn’t overlook segments of the pot industry that, while they don’t receive the same amount of attention as the recreational weed business, have huge potential for growth in the coming years.
While there are several marijuana-industry segments we could focus on today, I’ve decided to narrow it down to two specific areas that I predict will see massive growth in the coming years. These are areas that I believe are among some of the most overlooked by the everyday investor.
Overlooked Segment #1: Medical Marijuana
The first segment I’d like to tackle is medical marijuana.
I know a lot of you are thinking, “Doesn’t this market segment receive a lot of attention already?”
Frankly, you’d be surprised about how few investors consider the medical pot sector. Many consider it to be old news since legal recreational marijuana started gaining steam around the globe.
With so much of the oxygen being sucked up by the legalization of recreational pot, many forget the origins of the legal cannabis industry: medical marijuana.
On top of that, medical marijuana stocks remain the industry’s best hope to gain a foothold worldwide in the fastest way possible.
After all, it’s an easier sell in puritan nations when marijuana is a medicine rather than a substance used solely for a good time. As such, many countries are likely to pass medical marijuana legalization far before recreational pot legalization. In fact, many countries have already done so.
The U.S. is a prime example: only 11 states and D.C. legally permit recreational marijuana, but 33 states and D.C. permit medical pot.
The U.S. may lead the charge for federal recreational marijuana legalization by first legalizing medical marijuana.
Several Democratic presidential candidates have argued for total marijuana legalization—and their victory might speed the process along—but for all intents and purposes, the global marijuana trade will likely be led by medical marijuana before recreational pot.
One medical marijuana stock to watch is GW Pharmaceuticals PLC (NASDAQ:GWPH). It operates much like a pharma company, but its flagship drug is a cannabis-derived medicine that has been gaining popularity on a global scale.
The company’s “Epidiolex” medication (sometimes spelled “Epidyolex”) was the first cannabis-derived drug approved in the U.S. for prescription by doctors.
Now the drug is set to enter the European market, with European Union (EU) officials recently approving the use of the drug in 28 countries to treat seizures in patients with two rare, severe forms of childhood-onset epilepsy.
“We’ll be launching these countries over the next year or two and there’s a market of 500 million people in Europe and we’re very excited,” said CEO Justin Gover. (Source: “GW Pharma to launch first CBD-based epilepsy drug in Europe ‘over the next year or two,’ CEO says,” CNBC, September 24, 2019.)
The future is therefore quite bright for GWPH stock—and many other marijuana stocks seeking to capitalize on the growing acceptance of medical marijuana.
Chart courtesy of StockCharts.com
Overlooked Segment #2: Marijuana Vaping
On to the next overlooked segment of the marijuana industry: marijuana vaping.
Vaping in general has taken the West by storm, quickly becoming a very popular way for consumers to ingest inhalants.
Vape sales were among the fastest-growing segments of the marijuana industry in 2018 and much of 2019. (Source: “Chart: Marijuana vape sales rebounding in some key markets – for now,” Marijuana Business Daily, October 1, 2019.)
That makes marijuana vaping a very exciting segment of the market. If any particular pot company gets involved in it, investors would be wise to take note.
Now, there is an important caveat about marijuana vaping: health.
Sales in 2019 came to a halt following a number of health concerns being revealed that have led some states to institute vape sale bans. Not to mention the negative PR that has consumers steering away from marijuana vaping.
The fact that vaping still has several potential health concerns could very well derail its rapid rise if they were to be validated. If, for instance, it’s proven that marijuana vaping is bad for one’s health, then I anticipate this segment of the market flatlining.
The decline had already taken place in several major marijuana markets in the U.S., with a steady fall in vape sales since the first health issues were reported, according to Headset Inc., a data and analytics company focused on the cannabis industry.
That makes this marijuana market segment more volatile and vulnerable.
But the kicker is that many of the health problems associated with vaping were attributed to black market sellers. As such, if the marijuana industry is able to prove conclusively that vaping is not hazardous to one’s health, then I anticipate marijuana vape sales roaring back to life.
Investors who are able to see the growing segments of the marijuana sector and invest accordingly will likely see massive gains as the industry continues to expand.
One of the keys to outwitting the stock market is to find the less-talked-about segments of growing industries like pot and get in early. So when the rest of the market catches up, you’re there to reap the vast rewards.
That’s the case when it comes to both medical marijuana and marijuana vaping. While both carry a degree of risk, there’s ultimately profit in them for companies willing to take that on. Investors who get in on the ground floor of said companies are likely to see major boosts to their portfolios.