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Marijuana Stocks


The marijuana industry is quickly growing around the world. According to a report from Grand View Research, the global legal marijuana market is currently worth $13.8 billion and is on track to exceed $66 billion by the end of 2025.

This growth presents the investing opportunity of a lifetime, comparable to the California Gold Rush of 1849. Except in this case, there’s a growing supply. More marijuana stocks are sprouting up every day, making it easy for any investor to access the emerging marijuana trend.

The perception around marijuana is changing – both globally and in the United States. Marijuana’s medical benefits are well-documented. And recreational use is becoming more socially acceptable.

The tide is shifting, and Americans have let their state legislatures know with their votes. According to a Gallup survey, as recently as the mid-1990s, less than one-quarter of Americans were in favor of legalizing marijuana. Today, 2 out of every 3 Americans favor legalization.

In fact, medical marijuana is now legal in 33 states and Washington, D.C. – more than half the country. Ten states and Washington, D.C., have legalized adult recreational use. And every day more states are looking to join the ranks.

Why? States receive huge profits from marijuana. Since 2014, Colorado has generated more than $6.5 billion in marijuana sales. Thanks to marijuana taxes, licenses and fees, the state of Colorado received $1 billion in revenue. What state would want to miss out on that kind of money?

The revenue Colorado has generated from marijuana is just the beginning. The demand for marijuana across the United States is huge. And it’s only growing.

The graph below from Marijuana Business Daily shows how U.S. marijuana sales compared with other goods in 2017.


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Marijuana Stocks Will Benefit from U.S. Cannabis Sales

With revenue in the $5.8 billion to $6.6 billion range, sales of legal and recreational marijuana topped sales of all organic produce in 2017. Revenue for legal marijuana rivals America’s collective spending on Netflix subscriptions. Before long, marijuana will surpass McDonald’s in annual U.S. revenue. It’s remarkable how big the legal marijuana market is already. But legal sales represent only a fraction of the money to be made from marijuana.

When you include illegal sales, the total demand for recreational marijuana jumps from roughly $6 billion to $55 billion. There is a ton of money to be made if the federal government legalizes marijuana. It could surpass many other big industries in terms of revenue.

Estimated marijuana sales exceeded total video game sales in the U.S. in 2017. The video game industry is a large market on its own. Yet it’s estimated that marijuana sales are nearly $20 billion higher.

The demand for marijuana is huge. It might be more profitable than the cigarette industry going forward. Making marijuana federally legal opens up a wealth of opportunity for investors.

Whether or not marijuana is federally legal, investors are already profiting. The marijuana industry is going in only one direction – up. Why shouldn’t you profit from this emerging industry?

Our marijuana investing guide below shows you the best ways to invest in marijuana stocks.

Marijuana Investing 

There is big money to be made in marijuana stocks. Currently, many of the top pot stocks are Canadian, since marijuana is federally legal there and more startups are going public.

But marijuana’s murky legal status in the U.S. complicates the investing process here. Few marijuana stocks trade on the New York Stock Exchange and the Nasdaq, causing them to be more volatile. But the number of marijuana stocks traded on U.S. exchanges is slowly starting to grow – meaning more stability is on the horizon.

Many years down the road, marijuana stocks might become blue chip investments, like owning shares in Coca-Cola or American Express. But for now, it’s difficult to gauge which marijuana stocks will emerge. The risk is high, but so is the reward. If you diversify your bets, you might end up owning a piece of the next Microsoft of marijuana.

The marijuana industry is diverse, and there are many ways to get in on the action. Here are six of the best ways to invest in marijuana.

6 Ways to Invest in Marijuana 

Marijuana Growers 

Marijuana is a crop that requires time and resources to grow. There is a big market supporting marijuana agriculture. Large marijuana farms use complex hydroponic systems, tractors and tons of fertilizer. When federal legalization occurs, big agricultural companies will get involved in growing marijuana. To a certain extent, they already are. Scotts Miracle-Gro (NYSE: SMG) has entered the hydroponics industry with the acquisition of Sunlight Supply. More agricultural companies will invest in the marijuana industry.

Medical Marijuana & CBD

Medical marijuana treats many conditions, including cancer, Alzheimer’s, epilepsy and eating disorders. Cannabidiol (CBD) is one of the 113 identified cannabinoids in cannabis plants. It is nonpsychoactive and has been used to treat pain, reduce anxiety and help cancer patients. The CBD market is growing with new types of products. In 2018, CBD sales amounted to $591 million but are expected to skyrocket to $22 billion by 2022.

While marijuana’s legality is being worked out in the U.S., companies in the marijuana industry are taking advantage of loopholes. Charlotte’s Web Holdings (OTC: CWBHF) has done just that. Cannabis-derived CBD is still federally illegal, but hemp-derived products were recently legalized. Charlotte’s Web Holdings has its hemp-based CBD products in more than 3,600 retailers across the United States. The company is a safer bet for investors because it is not directly involved with cannabis. 

Marijuana Dispensaries 

You can buy marijuana at dispensaries opening all over the country. Buying marijuana in some states is as casual as buying groceries. And companies, like MedMen (OTC: MMNFF), attempt to create a luxury buying experience.

MedMen went public on the Canadian Stock Exchange on May 29, 2018. The company’s goal is to become the “Whole Foods of pot shops” – and it’s succeeding. Its California retail dispensaries average the same sales per square foot as Apple stores. Its upscale decor and helpful staff improve the experience.

With 32 dispensaries and licenses for 19 factories across 12 states, MedMen is looking to scale its business even further. Florida is its next target with plans to open up 12 new dispensaries and a 7,5550-square-foot facility in West Palm Beach. 

Marijuana Delivery Services

Eaze is the Uber of weed. Or, as its slogan goes, “marijuana delivered.”

For customers who don’t want to visit a dispensary, marijuana delivery services like Eaze will bring pot to your doorstep. Though not yet public, this company has a big team with fast delivery times.

Eaze launched in 2014, mainly for patients whose health prevented them from leaving home. After solving that problem, Eaze moved into the recreational market in 2016. What was a $1 billion medical marijuana market turned into a $7 billion market.

Eaze is scaling its business by diversifying its business model. Eaze recently announced “Eaze Wellness.” It’s an online marketplace where consumers can order CBD products. This is a logical next step for Eaze’s expansion efforts. Americans are curious about CBD, especially those looking for pain relief without psychoactive effects. The new platform is available to customers in 41 states and Washington, D.C.

Eaze is a cutting-edge marijuana company that could become a top marijuana stock. Investors are excited for this company to go public.

Marketing & Packaging Companies 

Canada has set tough regulations on what can and cannot appear on packaging – and marijuana companies are spending big money to get their marketing and packaging right. Companies like KushCo (OTC: KSHB) are capitalizing.

KuschCo went public in January 2016 under the name Kush Bottles. Since then, the company has expanded beyond its packaging roots. KushCo’s businesses include Kush Supply, Kush Energy, The Hybrid Creative and Koleto.

Kush Supply is the largest U.S. distributor of vaporizers, packaging supplies and accessories to growers, processors, extractors, manufacturers and retailers. Kush Energy focuses on pure hydrocarbon gases and solvents used to create extracts. The Hybrid Creative is the company’s creative design agency. And Koleto is for research and development.

KushCo is a one-stop shop for some major marijuana producers. The company has secured its ground in the marijuana space. Keep an eye on KushCo’s stock.

ETFs

To lower the volatility of single marijuana stock investing, you can buy multiple stocks through a marijuana exchange-traded fund (ETF). The marijuana ETFs that currently exist feature the industry’s biggest players, allowing you to gain broad investment exposure. By buying into a marijuana ETF, you can gain from the entire marijuana industry.

The largest marijuana ETF is the ETFMG Alternative Harvest ETF (NYSE: MJ). The fund manages $1.25 billion in assets, and about 40% are Canadian marijuana-related companies. The fund invests in companies that are loosely associated with the marijuana industry. For example, Scotts Miracle-Gro and Philip Morris International. While those companies derive little or no profit from the marijuana industry today, they very well may in the future.


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