Hunting for the Best Marijuana Stocks in 2017
One shot, one kill. Some luck, some skill. If you’re a Call of Duty fan like me, you’ll get the reference. In this game of wits, one accurate headshot will boost your stats. Investing is no different. Hit a bullseye on one good investment and you may strike it rich overnight. Just look at the pot bugs who, within a matter of days, not years, doubled or tripled their investments in marijuana stocks. But if you’re at a loss for good marijuana picks, maybe my list of the best marijuana stocks in the U.S. and a bunch of the best marijuana stocks in Canada can give you a head start.
You see, my friends, marijuana stocks are relishing their watershed moment. That’s because the long-held anti-marijuana beliefs of the mid-20th century are now dwindling. America is finally opening up to this stigmatic drug and we are the living generation to witness this transition firsthand.
Numerous surveys and polls have confirmed that the majority of Americans have now hopped over to the other side of the fence—the side that’s pro-legalization. That’s not only because they are all pot junkies, but also because it makes intuitive sense to them to legalize the drug and eradicate its black market.
Politics, however, remains the only buzzkill for marijuana stocks. With Donald Trump’s fickle moods and anti-marijuana aides-de-camp sitting left and right, marijuana stocks remain somewhat shrouded in the shadow of doubt.
I say “somewhat” because there’s a flip side of the coin that’s shiny and bright. Hold it angled northward and you’ll get what I’m talking about.
Kanata, my friends! The great Canada!
That’s where the real pot revolution is taking place. Canada is going to become the second country in the world, after Uruguay, to legalize recreational marijuana. So if you want to “hit the J” (merely a joint or, better yet, a jackpot in marijuana stocks), just head out “north of the wall.”
But wait, don’t be hasty! Do not write off the U.S. marijuana industry just yet. After all, 29 states have already legalized medical marijuana and eight of these have also given recreational use the green signal. So it’s not all doom and gloom. Better yet, one solid reason for investors to be hopeful now, more than ever, is that more and more states are moving towards legalization.
Take, for instance, that Michigan has launched a ballot drive this week to gather support for recreational pot. Weed enthusiasts are aiming to take the legalization matter to ballot as early as 2018. This means Michigan will likely turn out to be the ninth U.S. state to legalize the recreational use of weed.
Regardless, my point is that the multi-billion-dollar marijuana industry is bound to grow in the coming years. It is no longer a question, but rather a given.
If this growth won’t come from within, then without. I’m eyeing the two big sharks waiting on the sidelines for the right moment to dive in and catch these fingerlings. Both Big Pharma and Big Tobacco are likely to see great business opportunities in the budding marijuana industry.
I’ll explain that shortly.
But first, here is a list of some of the top marijuana companies publicly trading on the U.S. stock markets. Plus, towards the end, you’ll find my picks for the top Canadian marijuana companies, as promised. Now pay close attention!
List of Best Marijuana Stocks in U.S. and Canada
|GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH)||U.K.||Medical marijuana biotech stock|
|Cara Therapeutics Inc (NASDAQ:CARA)||U.S.||Medical marijuana biotech stock|
|Insys Therapeutics Inc (NASDAQ:INSY)||U.S.||Medical marijuana biotech stock|
|Axim Biotechnologies Inc (OTCMKTS:AXIM)||U.S.||Medical marijuana biotech stock|
|Scotts Miracle-Gro Co (NYSE:SMG)||U.S.||Sells marijuana growers tools and techniques.|
|AmeriCann Inc (OTCMKTS:ACAN)||U.S.||Marijuana grower stock|
|Praetorian Property Inc (OTCMKTS:PRRE)||U.S.||Marijuana real estate stock. Sells & leases real estate to marijuana growers and dispensaries|
|Cannabis Sativa Inc (OTCMKTS:CBDS)||U.S.||Marijuana dispensary stock|
|Cannabis Science Inc (OTCMKTS:CBIS)||U.S.||Medical marijuana biotech stock|
|United Cannabis Corp (OTCMKTS:CNAB)||U.S.||Medical marijuana biotech stock|
|Medical Marijuana Inc (OTCMKTS:MJNA)||U.S.||Medical marijuana biotech stock|
|Kush Bottles Inc (OTCMKTS:KSHB)||U.S.||Marijuana branding, marketing and packaging company|
|MassRoots Inc (OTCMKTS:MSRT)||U.S.||Marijuana social media stock|
|Canopy Growth Corp (TSE:WEED)||Canada||Marijuana grower stock|
|Aphria Inc (TSE:APH)||Canada||Marijuana grower stock|
|Aurora Cannabis (CVE:ACB)||Canada||Marijuana grower stock|
|Supreme Pharmaceuticals Inc (CNSX:SL)||Canada||Marijuana grower stock|
|Cronos Group Inc (CVE:MJN)||Canada||Marijuana grower stock|
|Emblem Corp (CVE:EMC)||Canada||Marijuana grower stock|
|Organigram Holdings Inc (CVE:OGI)||Canada||Marijuana grower stock|
Reading through their business focus, you must be surprised at how diverse the marijuana industry has gotten. I, for one, am in awe.
Beyond the juggernaut of marijuana growers and marijuana biotech companies, new forms of marijuana services companies have propped up. It’s quite fascinating that innovative startups have found their way into this industry, too. Here’s how I classify these marijuana stocks:
As you can tell, the industry is undergoing exponential growth with new players coming in. Here, we are talking about a $6.7-billion industry as of 2016, which is touted to hit $50.0 billion in sales in the next 10 years. There’s no better way to put it: the raw marijuana stocks are turning ripe, which is why I see industry consolidation in the cards.
Should You Invest in Marijuana Stocks?
This brings us full circle to my value proposition. I’m pitching marijuana companies to be great acquisition targets for the big names in both the pharmaceutical and tobacco industries. I’m particularly eyeing the biotech companies and marijuana cultivators.
In case you’re unaware and wondering, the biotech marijuana companies are busy formulating drugs that utilize marijuana’s medicinal properties to treat various kinds of patients. This is the little niche where Big Pharma can find a new moneymaking avenue.
Now hold that thought and look at the weed producers. These companies grow and sell various strains of the green grass—with some growing them indoors, while others grow them outdoors or in greenhouse facilities.
This is where Big Tobacco could jump in. I’m thinking branded reefers like tobacco cigarettes. Sounds far-fetched? Well, don’t rule out that idea just yet.
Let me give you examples to make this idea clearer.
Consider AbbVie Inc (NYSE:ABBV), one of the biggest pharma companies spun off from Abbott Laboratories. Did you know that AbbVie has a popular drug that derives its pain-relieving properties from marijuana? AbbVie’s “Marinol” is formulated with tetrahydrocannabinol (THC), a component found in marijuana.
My point is that some traditional pharma names have already found worth in this green grass. So think about it; why would other big pharma players like Pfizer Inc. (NYSE:PFE), Merck & Co., Inc. (NYSE:MRK), and Novartis AG (ADR)(NYSE:NVS) want to miss an opportunity to make an extra buck from this expanding market?
This is why it makes sense for them to either start building their own marijuana drugs from scratch, or just skip that extra step and outrightly acquire a marijuana biotech company.
So I won’t hold myself back from whispering this around that companies like Insys Therapeutics could make for good acquisition targets. You see, Insys already has an FDA-approved marijuana drug, “Syndros,” that directly competes with AbbVie’s Marinol. As for the rest, well, you can put two and two together.
Likewise, any of the four big players in the tobacco industry—Altria Group Inc (NYSE:MO), Philip Morris International Inc. (NYSE:PM), Reynolds American, Inc. (NYSE:RAI), and British American Tobacco plc (LON:BATS)—will find value in taking a marijuana grower under its wing.
Just think about it; once recreational marijuana is legalized in Canada, pot lovers would want to buy and enjoy their joints with the same ease as tobacco lovers do cigarettes. It’s not a wild speculation that we may eventually see factory-rolled reefers neatly lined up in branded packs and selling at variety stores like cigarettes.
If you’ve been following me, you may have read my pitch on Aphria stock. I see greater growth potential in this company than any other at this point in time.
For starters, Aphria is no longer narrowly focused on the Canadian market at home. The company has made a bold move of going international. Aphria has just entered the U.S. market, making its way through Florida, with plans to eventually expand into other states where marijuana is legal in one form or the other.
Plus, to keep up with producing higher output following the expansion, Aphria managed to raise $100.0 million in equity and debt financing just last month. For a modest Canadian marijuana grower to rake in that kind of funding is a feat in and of itself. So expect this marijuana company to be firing on all cylinders in the coming days.
All in all, if you dig deeper into these companies, you may be able to find some dark horses that could surprise you in the last lap of the race with unexpected gains.
For motivation, consider their recent performance. Most of these marijuana stocks worked their magic in investors’ portfolios with astounding double-, triple-, and even quadruple-digit gains.
Final Word on Investing in Marijuana Stocks
If you’re anti-legalization, then you may hate me for saying this, but I foresee America to be unwittingly treading down the same path as its next-door neighbor. I’m seeing federal-level legalization in the cards. Albeit, not any time soon, but certainly in the years to come. How can I say this with so much conviction? Because the groundwork for it is already being laid by the states. If you don’t see it, you’re hopelessly in denial.
If you’re pro-legalization and all this commentary has piqued your hopes in marijuana stocks, then make no mistake that this industry is still fraught with risk. I liken it with playing Russian Roulette. If it’s not your day and you pull the trigger, you stand the risk of losing all your money.
I don’t mean to throw the scare into my readers, but way too much exuberance in the market makes me jittery.
Nonetheless, I stand by my proposition of a likely vertical or horizontal consolidation in the marijuana industry. This could come as an acquisition by a big player or a merger between any two of these small players.
That said, weigh all your options before jumping on the bandwagon. Don’t over-allocate significant portions of your portfolio to marijuana stocks alone. Steer clear of pink-sheet and penny stocks and perhaps go for the more transparent publicly traded companies. Also, maybe avoid the temptation of trading and embrace long-term investing, for that could bear the real fruit of your patience.
Finally, if you’ve planned to take the shot (that is, to invest in marijuana stocks), then aim for the head (that is, pick the best ones) and leave the rest to fate (read: buy, hold, and forget), because que sera sera!