Vireo Health & Medical Marijuana Stocks’ Path to Profits
What Oklahoma Has to Do with Medical Marijuana Stocks
The recreational marijuana market gets a lot of attention these days, but that doesn’t mean the medical marijuana sector is dead. There are a number of medical marijuana stocks looking to absolutely explode in 2020, with Vireo Health International Inc (OTCMKTS:VREOF, CNSX:VREO) leading the pack.
Vireo stock could, in my mind, easily double in the coming years. I’ll explain why below.
First, let’s take a look at what makes medical marijuana stocks so darn enticing. In order to do that, we have to head down to Oklahoma.
Oklahoma is hardly the first state you think of when you consider marijuana legalization. It’s not exactly brimming with the pot-loving hippie culture that many associate with high marijuana usage.
Despite that, in less than a year, the Oklahoma medical marijuana industry has gone from having zero medical marijuana sales to becoming one of the most valuable cannabis markets in the entire United States. (Source: “Chart: Oklahoma medical marijuana sales far exceed expectations,” Marijuana Business Daily, November 19, 2019.)
The Oklahoma Tax Commission produced receipts showing that sales of medical marijuana in the state hit $258.0 million through the first 10 months of 2019, and are likely going to eclipse $350.0 million by 2020—going far higher than most analysts’ expectations.
Oklahoma has, in fact, left many other states with legal recreational markets far back in their dust, becoming one of the more unlikely success stories in pot.
Patient counts for the state hit 210,000 at the beginning of November, more than eight times the number of patients registered at the end of 2018. (Source: Ibid.)
More than five percent of Oklahoma’s entire population is now registered to use medical cannabis, far exceeding any other program in the United States.
This is naturally great for U.S. medical marijuana stocks (more on that below, with a focus on VREOF stock). But we have to understand how Oklahoma sparked such an amazing start in order to better project medical marijuana stock growth moving forward.
The thing about the Oklahoma medical marijuana market is that it isn’t constrained by government overreach the way many other pot markets have been.
Oklahoma is unique in that it does not limit the number of pot business licenses that can be awarded. Compare that to Ontario, Canada, where all forms of marijuana are legal, yet the province is limited to only a handful of storefronts by the government.
Sure, more stores are being added in Ontario, but part of the reason that legal marijuana sales have lagged in Canada is precisely this type of overreach by government.
Consider also that Ontario has roughly four times the population of Oklahoma and you’ll begin to understand why the marijuana industry slowed in the summer—and why, when all this regulation gets streamlined, marijuana stocks will thrive again.
Another interesting note about the medical marijuana market in Oklahoma is that doctors are unfettered when it comes to recommending marijuana for any problem they deem fit.
That allows them leeway in prescribing pot, as well as virtually creating a recreational weed market akin to Canada pre-legalization, whereby “patients” go in with a rote set of problems they quickly recite in order to be prescribed marijuana. And this de facto legal marijuana market is blooming in Oklahoma, with strong signs of marijuana stock growth in the U.S. moving forward.
The final factor in the Oklahoma medical marijuana market’s favor is that municipalities in the state are barred from enacting zoning restrictions to prevent dispensaries from opening.
This is particularly unique, as many governments tend to pass such restrictions when enacting marijuana legislation, if only to appease the more puritan constituents.
With Oklahoma’s business-friendly marijuana rollout comes a prosperous pot market. It’s not exactly rocket science.
If you create a favorable environment for marijuana companies, they will succeed. The consumer base is there and the product has been tried and tested for generations now.
The only thing getting in the way is an overzealous government that often spites the legal market with too-high taxation and burdensome regulation that ends up allowing the black market to thrive. After all, illegal dealers hardly have to worry about packaging fees when plying their wares.
Oklahoma should then stand as a shining success story in the marijuana industry and show many investors just how strong the market is, both for medical marijuana and recreational marijuana stocks.
Oklahoma, with its roughly four million people, has issued licenses for 2,168 dispensaries, 1,415 processors, and 4,931 growers.
Those are powerful numbers for a such a small and not particularly marijuana-friendly state (it hasn’t, after all, legalized recreational pot like 11 other states and D.C. have).
We don’t know how many of those businesses are up and running, but even if 2.5% of these licenses result in open-for-business dispensaries, this would far outnumber the 25 storefronts currently in operation in Ontario.
Again, one type is for medical marijuana and the other is for recreational pot, but the comparison is apt: if governments get out of the way, the marijuana market (and marijuana stocks, as a result) will thrive.
Projections for the Oklahoma medical pot market now expect it to hit $700.0 million annually. Oklahoma represents less than one percent of the U.S. population, so with some quick math, this means that the medical marijuana market could potentially be worth over $70.0 billion nationwide.
The key, of course, would be enacting marijuana laws that are as business-friendly and permissive as Oklahoma’s.
In any case, the potential for pot stocks of all stripes to surge is very real. I believe that marijuana stocks will skyrocket in the coming years as governments learn to step out of the way and let the pot industry grow organically from the ground up.
Vireo Stock Represents Pot’s Future
So, with all the hype surrounding the medical marijuana market in the U.S., it feels right to highlight one of the strongest performers in that sector.
In the past 10 days or so, one U.S. medical marijuana stock has put the rest to shame. I’m talking about Vireo stock, which I mentioned earlier.
So what makes VREOF stock so compelling? It’s actually not ‘”what” but “who” that makes Vireo stock special; Bruce Linton joined the company, chairing the board and planning to work closely with the CEO, Dr. Kyle Kingsley.
Linton, you may remember, is the former head of Canopy Growth Corp (NYSE:CGC) who took the fledgling pot company to market dominance before his sudden departure.
He is the biggest name in marijuana. For a small marijuana penny stock to score his help is monumental to the company’s future, and the recent share-price surge demonstrates that.
Chart courtesy of StockCharts.com
When Linton was let go from Canopy Growth, he had his pick of the industry in terms of where he wanted to land. After all, his track record spoke for itself. He is one of the defining figures of the now multi-billion-dollar legal marijuana industry, there from the beginning and helping to grow it internationally.
The fact that Linton chose the relatively unknown Vireo bodes well for small U.S. medical marijuana stocks.
And Vireo is a U.S. marijuana company, representing Linton’s shift from the Canadian market (which is maturing) to the fledgling U.S. marijuana market (which still has a long way to go).
If Linton is hoping to build a second Canopy Growth in the U.S. by way of Vireo, then the 35% gains that VREOF stock has earned since Linton’s arrival will be just a taste of what’s to come.
“This is a science-backed marijuana company that met my criteria for best practices and a valid methodology,” said Linton when he joined the company. (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.”
And its lack of notoriety is actually a huge benefit for Vireo.
Going from virtually unknown to internationally recognized with the addition of Linton is the perfect way to see massive stock surges. After all, the boost in profile will mean more potential investors coming in, as well as more deals on the table.
It’s also worth noting that Linton’s plethora of contacts in the upper echelon of the pot industry will go a long way toward growing VREOF stock.
Company Overview & Vireo Stock Prediction
Vireo Health International Inc. which is based in Minneapolis, was established five years ago. The medical cannabis company is active in 11 states and in Canada, with offices in cities such as New York, Denver, and Montreal.
But, again, what makes Vireo truly special is that the company now counts Linton among its ranks.
“We really looked to bring in professionals that understand science and intellectual property,” said Kingsley. (Source: Ibid.)
The company, which has about 400 employees, registered $18.5 million in revenue for fiscal 2018.
Vireo produces pharmaceutical-grade products for medical patients, high-potency soft gels, and vaporizer cartridges. The company has 13 patents pending, 11 manufacturing licenses, 32 dispensary licenses, and two hemp licenses.
My Vireo stock prediction sees it having the potential to double in price in the coming years, with U.S. marijuana legalization and Linton’s numerous connections possibly allowing the stock to triple or more in the next five or so years.
All in all, the long-term outlook of VREOF stock is extremely bright.
Analyst Take
The medical marijuana industry in the U.S. is electric. There’s so much potential waiting to be tapped into that early investors should see their portfolios swell with gains in the coming years.
Oklahoma is a perfect microcosm of the grander market, showing how much potential is brimming within the U.S. medical marijuana market.
Medical pot stocks like Vireo stock are looking to take advantage of that potential and are therefore very exciting plays right now.
