A quick overview of notable Canadian Cannabis Stocks:
The cannabis industry is skyrocketing with increased consumption rates and financial backing from hopeful investors. In fact, in 2018 alone, cannabis companies were able to raise a whopping $13.8 billion and go through an unprecedented 300 merger and acquisition deals. These hard numbers are far beyond 2017’s $3.5 billion raised and 153 mergers & acquisitions.
It’s safe to say that investors are eager to stake their claim in the cannabis stock rush. Although the end of 2018 saw a hefty setback for many major cannabis stocks, financial experts predict that 2019 will reward early stock investors, but not without some risk.
The Cannabis Industry Explained
Before dumping all of their money into seemingly rising marijuana stocks, investors and firms consider a company's respective market, demographics, etc. For example, full cannabis legalization in Canada has attracted the most investment activity due to the opportunities there, but Canada is just one piece of the pie. Arcview Market Research reveals that three-quarters of the projected cannabis market will come from the U.S. at $23.4 billion.
There’s plenty of variety in cannabis stocks ranging from producers to ancillary services to cannabis pharmaceuticals. While producers are more closely in sync with the actual growing of the plant, ancillary services like grow light companies, law firms, and packaging companies keep the green machine moving along. Investing in marijuana stocks, however, seems to be full of risk and hope for major returns.
Stock Growth Is Inevitable
With emerging cannabis markets opening up to cannabis producers and legalization efforts underway in other countries like Mexico, growth opportunities are found in droves. It’s important to consider federal regulations that restrict cannabis use that may limit certain stock opportunities. Despite the presence of cannabis scams fooling investors and the looming risk of a cannabis stock bubble, many investments will pay off handsomely for the major players.
Canada’s Tilray was the first cannabis company to go public on Nasdaq in July 2018 with escalating stock growth paired with volatility toward the end of the year. Tilray’s growth expanded when the U.S. approved a plan to import cannabis to the University of California San Diego’s research program. It’s recently gained large investments from Barclay’s and Anheuser-Busch InBev.
Canopy Growth (CGC)
Although Canopy Growth wasn’t immune to the across-the-board stock sell off last year, its partnership with Constellation Brands (alcohol beverage producer) keeps their funding high. More recently, Canopy Growth has announced it’s investing $150 million in New York to build a hemp industrial park following the latest loosening Farm Bill regulations. Canopy recently reported Q3 revenue, which rose 282% year-over-year and captured 30% of legal market share.
Cronos Group (CRON)
Cronos Group is a vertically-structured Canadian marijuana greenhouse grower and manufacturer that handles every aspect of its supply chain. Cronos Group’s partnership with Altria Group (tobacco company) resulted in a $1.8 billion deal to expand its CBD line. Altria’s ownership of Juul (vape company) puts the Cronos Group in a good place to take over the CBD vaporizer market.
GW Pharmaceuticals (GWPH)
U.K.-based GW Pharmaceuticals formulates cannabinoid-based medications using cannabinoid extracts. In June 2018, the FDA approved Epidiolex, GW’s prescription medicine used to treat severe forms of epilepsy becoming the first of its kind.
Aurora Cannabis (ACB)
Aurora Cannabis’ troubling volatility on the New York Stock Exchange is tempered with big acquisitions of MedReleaf and CannaMed making Aurora a leading Canadian cannabis supplier. Aurora’s acquisition of Farmacias Magistrales in Mexico gives them a way into the burgeoning Latin American cannabis market. Aurora recently reported Q2 earnings and captured 20% of the legal market share since October 17, 2018.
As cannabis companies have learned from the legalization process, it can take a long time before complete legalization is possible in the U.S. Until then, there are a bountiful amount of cannabis companies ready to blossom with a little help from investors.