Are you lookin for cannabis stocks to trade? Ever year it seems to be that marijuana is going to become fully legal. As a result, pot stocks fly. The stock markets have thousands of wonderful companies and millions of amazing stocks to invest in or trade. People have made millions through this marvelous creation. However, to get to a level where you can earn great profits requires knowledge, skill, and determination.
In order to master the art of investing and trading, one has to have the passion and determination to learn and gain knowledge. While there are various sectors in the financial markets like banking, automobile, pharmaceutical, and many more, one such trending and hot sector nowadays is the Cannabis sector.
With recent developments and legalization, the cannabis industry is booming and so are its stocks. So in this article, we’ll explore the cannabis industry in detail. Then provide the essential knowledge that any investor or trader should have about the cannabis industry and its stocks.
Table of Contents
- List of Cannabis Stocks
- The Top Cannabis Stocks
- The Complete Legalization of Marijuana in the United States
- Cannabis Stocks Watchlist
List of Cannabis Stocks
|TCNNF||Trulieve Cannabis Corp.|
|IIPR||Innovative Industrial Properties|
|GTBIF||Green Thumb Industries|
The Cannabis Industry
Cannabis has been present in our society for decades. But with recent legalization and developments in rules and regulations, cannabis has emerged out and become a multi-billion-dollar industry. With its roots embedded deep within sectors such as health care, pharmaceuticals, agriculture and even recreational goods, it’s on the rise. The companies involved with cannabis are booming. And so are their share prices. In recent times, cannabis stocks are on the rise with great bullish moves when observed in a longer time frame.
This industry is developing and evolving with time because of the ongoing debates and rule changes with legalization. And with public support, the use of medical and recreational marijuana has seen a huge growth spurt.
According to data, the global cannabis market was estimated to be worth around fourteen billion dollars. In fact, it continues to grow with each passing day.
With the recent rise in this sector and tremendous growth potential, cannabis stocks have grabbed the attention of investors and traders; providing attractive and profitable opportunities.
In fact, a lot companies are getting onto the CBD hype train. CBD oil stocks are on the rise as a result.
The Difference Between Medical and Recreational Cannabis Companies
With a huge trend evolving in the cannabis sector, investors and companies have all been thrilled to grab opportunities in the financial world of the cannabis.
With companies reaching billion dollar valuations, this sector is trending with a boom. There are two different types of cannabis companies, however. One which are involved with medical marijuana and the other who are involved with recreational marijuana. Both these sectors have huge companies.
As a result, their stocks are providing attractive opportunities. So let’s understand the difference between these cannabis stocks.
Medical Cannabis Stocks Companies
As the name suggests, these companies have applications in the medical field of cannabis. They’re involved in research and development for the treatment and cure for certain health problems.
Those problems which can be cured or helped by cannabis. With doctors acknowledging the benefits of cannabis are actively prescribing it, the sector of medical cannabis is one with tremendous growth potential and an optimistic future.
Recreational Cannabis Stocks Companies
Although medical marijuana was legalized before recreational marijuana, the recreational marijuana sector caters to a very large and vast range of audience.
With thousands of cannabis users, this sector has a never-ending demand. The companies involved with recreational marijuana primarily create products that have THC.
This is a psychoactive agent that’s responsible for the high that users obtain from using cannabis. So, these companies produce products like marijuana-infused cigarettes, edibles, and even THC beer to coffee.
While certain states still need to legalize the use of cannabis, the majority of places now actively allow the use of recreational cannabis. Thus providing great potential for growth.
The Top Cannabis Stocks
With various successful cannabis companies actively dealing in the market, there are thousands of cannabis stocks. But there are a few superior and top companies that have shown remarkable performance and results.
This has led to the creation of some amazing cannabis stocks. As a result, we posted some of the top cannabis stocks above. Let’s take a deeper look into these companies.
Trulieve Cannabis Corp. – TCNNF
Trulieve Cannabis Corp is an excellent company that investors should plan on holding for the long run. Their primary focus is on the Florida medical cannabis market.
As a result, they dominate roughly fifty percent of the sales in the entire state. With consistent growth in earnings and profits, Trulieve Cannabis Corp has reported a revenue of $216.9 million for the first two quarters of 2020.
With superior management and a perfect development strategy, this company is definitely on the rise. It could be one to keep an eye on. Especially if you’re looking to grow a small account.
GW Pharmaceuticals – GWPH
GW Pharmaceuticals is a cannabis-focused biotech company with a remarkable journey. Their drug ‘Epidiolex’ became the first drug made from cannabis which was to be approved by the U.S. Food and Drug Administration.
Their primary focus is the medical marijuana market. They aim to create drugs infused with the healing properties of cannabis to cure many ailments.
With several cannabis-based clinical trials and developments in progress, this company has shown steady and powerful growth. Which makes its stock a worthy buy.
Innovative Industrial Properties – IIPR
Innovative Industrial Properties is a company that has a unique and interesting strategy. It involves acquiring medical-use cannabis facilities from the U.S. medical cannabis operators. And then leasing said properties.
This company has seen a huge rise in its growth and has created a steady revenue stream through its operations. This stock is one of the top cannabis stocks which an investor should look out for.
They had phenomenal growth showcased; even during the Covid pandemic. Therefore, this company is definitely worth observing.
Grow Generation – GRWG
There’s an ever-growing market of supplies for growing plants without soil. Instead they use liquid nutrient solutions. As a result, it’s seen huge growth and is in demand.
Grow Generation has captured this sector with its superior products. Grow Generation is the largest retail chain that primarily caters to this market.
They provide innovative solutions to cannabis growers. This has led to a huge surge in customers. Which results in driving the company’s profits up. Therefore, this stock is definitely one to keep an eye out for.
Green Thumb Industries – GTBIF
Green Thumb Industries is a company that is primarily forces in the recreational marijuana sector, and has been capturing the market with remarkable presence.
They’re based in Illinois and have over twelve stores across the U.S. On top of that, they manage and run thirteen manufacturing facilities.
They reported revenue of $119.6 million in the second quarter; which is an increase of over 167% over last year. As a result, this company is on the rise despite the current scenario. This stock is a good choice for investors and their portfolios
With the legalization of cannabis, the growth in this sector is happening at a rapid pace. Companies are racing to achieve better results and get their roots deep into the system; be it recreational or medicinal.
With the rise in the cannabis sector, it opens a new door for investments and growth. Exchange-traded funds have seen a huge rise in recent years.
And it was only a matter of time before cannabis entered this sector. This is a new concept and its creation is the result of the phenomenal growth in the cannabis sector.
Marijuana ETFs are similar to regular ETFs. And just like any other ETF, it’s a basket of stocks that are related to the cannabis industry. This is a relatively new concept.
As a result, it’ll take time for investors and traders to involve it in their financial portfolios. But marijuana ETFs have good future potential.
Which could be huge in the future. Marijuana ETFs do face certain setbacks and challenges with the regulatory authorities. However, it’s a matter of time before they are accepted and involved in the financial markets.
The Complete Legalization of Marijuana in the United States
Very few countries allow their citizens and foreigners to purchase recreational cannabis as well as use medical cannabis. Canada is the only example with no limitations on both levels.
Imagine alcohol was only available in corner shops in one country. The world would go mad. Back to cannabis. Many countries decriminalized cannabis and allow its medical use. What does that mean?
Basically, you can smoke, but be discreet about it. Mexico is in the midst of making big changes regarding marijuana use. At the moment, a permit is necessary for consumption, possession and cultivation.
However, it remains illegal for the moment to sell it. If Mexico decides to legalize cannabis, it would be a big step forward in the cartel war. What about in the US?
Cannabis in the US
In the US, marijuana is legal in 19 states, 2 territories and DC. In 12 other states and 1 territory, it is decriminalized. Federally, it remains illegal. When producers want to transport their products from state to state, they can only cross state borders where cannabis is legal.
Furthermore, every state has its own laws regarding its use. Furthermore, cannabis companies aren’t allowed to open bank accounts. They must hold their money in a safe place and pay their employees cash. It is also very difficult to obtain a loan or line of credit from major financial institutions in the US.
Amazon is one of the biggest lobbyists for marijuana legalization along with other multinational companies. A 2021 poll showed that 68% of Americans are FOR marijuana legalization.
Unfortunately, politics in the US are run by senior citizens with little to no knowledge of current issues, business opportunities and care for their constituents. The Secure and Fair Enforcement Banking Act (SAFE) is a perfect example of political failure in the US.
Path to US Cannabis Stocks Legalization
Over the last few years, the laws around cannabis and its use have been changing. It seems that legalization is happening at a fast pace.
While there are certain positive things moving in favor of the cannabis industry, it also has to overcome certain challenges and setbacks.
These are hurdles for the growth of this sector. So an investor or trader should be cautious and aware of the challenges that the cannabis sector faces.
The SAFE banking act was approved SIX TIMES in the US by the House representatives. Unfortunately, it has yet to get any support in the Senate or from the President due to left-right political nonsense.
The previous vote even had bipartisan support. What else do they need? SAFE Banking act is an important step toward legalization. It would allow companies to transact legally across the country and to uplist to the NYSE and NASDAQ instead of trading in the OTC markets.
Consequently, cannabis investors have been living in a delusional world of hope. Every week, online forums track political and economic movements in this industry. Unfortunately, they are currently drowning in a sea of red.
Many investors truly believe in the cannabis industry. It was once deemed a once-in-a-lifetime opportunity for investors. Today, the majority of investors have lost hope. If you are among them, don’t lose hope. Many companies are trading well below their target prices and realistic market value.
Will cannabis investors be finally rewarded this year like oil investors or will stocks reach new lows on a daily basis? It is still uncertain, but we can deduct which companies may come on top once everything becomes legal.
Taxation and Valuation of Cannabis Stocks Companies
A major point of concern for cannabis companies is regarding the taxes that states will apply to them. If the taxes are too high, then it may be difficult to sustain companies. And if it’s too low, then the supply will be greater than the demand; creating an unstable market scenario.
Another point of concern is the future of cannabis companies due to the current trend and rise of the industry. Thousands of new cannabis companies have emerged.
But in every market, only a few companies can have dominance and come out successful. It stands to reason that companies emerging today could be shut down or take on heavy loss; all due to saturation and competition.
Cannabis Stocks Watchlist
Despite cannabis legalization in the US hopefully coming sometime before the end of the century, some companies are already profitable in their operations. Let’s take a look at a few on both sides of the border.
Cresco Labs currently operates in 17 US states and leads the way in terms of market share in Illinois, Pennsylvania, Colorado and Virginia. The company recently bought Columbia Care for $2B, effectively expanding its footprint in the Northern states and increasing its customer base. The partnership created one of the biggest cannabis companies in the world. Consumers are very satisfied with the product, but the stock is trading well below analyst expectations. When we compare the company’s yearly revenue, it’s almost equal to its market cap. If prices keep dropping, they’ll soon be on par, which is unrealistic in any industry.
Cannabis Companies Watchlist
Truelieve’s home state of Florida is its strongest asset with over 100 locations. Across the US, the company has 165 retail locations across 11 states. Despite a net loss in 2021, YoY revenue growth is an impressive 64%. The loss was due to the acquisition of fellow competitor Harvest Health & Recreation. This acquisition solidified Truelieve’s sales in Arizona, Maryland and Pennsylvania. Growth in 2022 is expected to surpass $1B in sales which makes it one of the leaders in the cannabis industry. Many industry analysts see over a 300% upside. This number will undoubtedly increase once the US legalizes cannabis federally.
Last on our list of US cannabis stocks is Green Thumb Industries. The company has been profitable for 7 consecutive quarters, but its margins remain short of industry expectations. GTI operates on a smaller scale than its competitors. The company has only 77 dispensaries across 15 states. It still has plenty of room to grow and its stock is heavily undervalued.
If you’re looking for a way to invest in real estate and cannabis simultaneously, Innovative Industrial Properties is your answer. The company acts as a REIT for cannabis companies. It buys properties and then rents them to licensed companies for 15 to 20-year leases. IIPR works with top-tier cannabis producers and is expanding with the purchase of more buildings. As more states legalize marijuana, this company will keep growing and build partnerships with more cannabis companies.
The Future of Cannabis Industry and Cannabis Stocks
Being the world’s most commonly cultivated, trafficked, and used drug, cannabis is bound to grow. And with a huge backing and push for legalization, the cannabis industry sure has a bright and optimistic future.
One with tremendous potential for growth. The drug is already legal in thirty-three states and fourteen states allowing it even for recreational purposes. So there’s no denying that the future for cannabis companies holds great opportunities.
But every investor or trader should carefully study this opportunity to create huge profits. It’s possible in this fast, dynamic and ever-growing cannabis sector.
All it takes is knowledge and information to capture the amazing opportunities that the cannabis industry and its stocks have to offer.
To conclude, there is tons of growth left in the marijuana industry. This isn’t only limited to the US. Companies on both sides of the border can benefit from a first-mover advantage to expand internationally.
Canada and the US can benefit from large amounts of land to produce large amounts of cannabis products. In the US, it still remains unknown when legalization will take effect. It can be months just like it can be years. Legalization can bring much-needed tax revenue and job creation to the country.
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