5 Blue-Chip "Marijuana Stocks"
The legality of cannabis – marijuana – within the United States is a gray area.
The legality of cannabis – marijuana – within the United States is a gray area. It’s illegal in all forms at a federal level, but the nation’s Drug Enforcement Agency and other law-enforcement arms have largely decided to turn a blind eye to states that have legalized cannabis one way or another.
Nevertheless, the cannabis industry to date remains fragmented, served only by relatively small marijuana stocks and private companies that lose money more often than not. The missing ingredient: scale, or size.
While so-called “mom ‘n’ pop” shops may be able to eke out reliable profits, attempts at mass marketing have largely been fiscal failures. The cannabis business needs bigger backers if it’s going to become a mass-market product. But Fortune 500 companies have mostly opted to steer clear given the inconsistent and unclear legalities.
That’s changing, though. A handful of large, prominent companies are signaling that this market is becoming big enough to address. Today, we’ll give you a rundown of five blue-chip “marijuana stocks” to watch. Just note: These are enormous multinationals bringing in billions of dollars in revenues. Merely dipping a toe into the cannabis business won’t make these stocks suddenly double overnight. Instead, they offer ways to invest in sound, profitable businesses … with the potential for a little additional marijuana upside.
Of the five stocks discussed in this article, beverage giant Coca-Cola (KO, $45.68) seemed the least likely to venture into the marijuana fray. But Coca-Cola shocked the world in September when it conceded it was thinking about it.
Let’s be clear: That’s a far cry from being in the business. Coca-Cola spokesman Kent Landers ultimately declared in an interview with BNN Bloomberg that “no decisions have been made at this time.” Still, merely saying “We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world” is significant.
There are credible hints that the potential product in mind is a cannabidiol-infused drink. The company reportedly is in talks with Canadian marijuana stock Aurora Cannabis (ACBFF), which already is a key North American supplier of legal cannabis. Aurora already offers a cannabis-infused drink of its own, but it lacks the marketing firepower of a blue-chip stock such as Coca-Cola. A partnership between the two could be a win-win.
Cowen analyst Vivien Azer wrote, “Beyond KO, we would not be surprised to hear of a deal from (PepsiCo) as well (with CBD seemingly a good complement to their market share leading Gatorade franchise).”
Imperial Tobacco Group
Don’t let Imperial Tobacco Group’s (IMBBY, $34.60) over-the-counter listing fool you. OTC-listing fool you. Imperial is a stable, reputable $32 billion cigarette company. The U.K.-based firm simply doesn’t bother to maintain an exchange listing in the United States, which can often be more of a headache than it’s worth.
The company already has shown some interest in the legal marijuana business by virtue of a recent investment in a young cannabinoid company. That company is U.K.-based biopharma outfit Oxford Cannabinoid Technologies, or OCT.
Imperial Brands Ventures, a division of Imperial Tobacco, bought an undisclosed stake in the company in July. Imperial Chief Development Officer Matthew Phillips explained at the time, “Cannabinoid products have significant potential and our investment enables Imperial to support OCT’s important research while building a deeper understanding of the medical cannabis market.”
There’s still a considerable disconnect between tobacco cigarettes and medical cannabis, calling into question the potential synergies of the relationship. It seems unlikely consumers will be able to simply pick up a pack of marijuana cigarettes at their local convenience store, where Imperial Tobacco has a solid presence, anytime soon. The investment is only a stake in a healthcare company, and a speculative one at that.
Nevertheless, Imperial may have just tipped its hand.
Peter Horvath, CEO of cannabis company Green Growth Brands, has seen the revolution start to unfurl firsthand. But the industry has only scratched the surface. He explains, “As cannabis continues to evolve to the mainstream, in Canada on October 17, and state-by-state in the U.S., more and more large companies AND talent from those companies will enter the market, because no other market is growing like this market … depending on your source, +$28 billion USD in the next 5 years.”
Through his business-oriented lens, Horvath also knows where many of those consumer dollars are being redirected from: “Clearly, liquor needs to hedge customer migration to cannabis,” he says. “Beer is suffering, and liquor is down in mature recreational cannabis state in the U.S.”
The trend poses a direct threat to beer giant Molson Coors (TAP, $61.84), though the company may not be as behind the eight ball as it seems. In early August, Molson Coors’ Canadian unit entered into a joint venture with The Hydropothecary Corporation “to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market.”
The exact nature and target market for this beverage is not yet clear; the companies themselves may not have anything particular in mind. But it is clear that Molson Coors knows it needed to plant a seed.
Despite a variety of ways to ingest it and enjoy the euphoric high of recreational marijuana, simply smoking it remains the preferred means of use. That leaves traditional tobacco stocks such as the aforementioned Imperial Tobacco and Philip Morris (PM, $79.91) the odds-on favorites to make the most out of ongoing legalization efforts here and abroad.
That said, cigarette companies may not be quite as keen to rush into the marijuana market as many believe.
Andrew Kessner, Equity Research Analyst at William O’Neil & Co., recently explained, “We think big tobacco will remain much more cautious than beverage makers about expanding into cannabis. These companies are hoping to gain FDA approval for reduced risk tobacco products (RRPs), like Philip Morris’s IQOS heated tobacco device. We believe a cannabis acquisition, even if outside the U.S., could weaken their standing with the agency and potentially jeopardize these RRP approval efforts.”
Philip Morris CEO Andre Calantzopoulos recently echoed the sentiment, telling Bloomberg the company has no plans at this time to enter the cannabis market. He also noted its recent efforts to cultivate alternatives to tobacco cigarettes.
But Calantzopoulos also glossed over the fact that the company is already in the cannabis business, even if it’s just indirectly.
In early 2016, Philip Morris invested $20 million in Israeli startup Syqe Medical, which has developed a metered-dose vaporizer of raw plant material. It’s for medical purposes only – for now – but it’s still a stake in the movement, and the technology could arguably be adapted for a variety of non-medicinal uses.
30 Marijuana Stocks to Buy as the Future Turns Green
[Editor’s note: This story was originally published in May 2018. It has since been republished and updated to include the most relevant information available. At least one stock has been removed from this list.]
In the digital era, it feels ironic that one of the hottest sectors in the market today is levered toward a naturally-occurring substance with a history spanning millennia. I’m speaking, of course, about marijuana stocks. Through favorable legislation across the globe, the botanical industry has begun to transition from the black market to a legitimate one.
Theoretically, this should bolster the long-term narrative for marijuana stocks. Unfortunately, as we saw in 2019, reality doesn’t always align with expectations. With many cannabis firms focused on growth and expansion, several names were left fiscally vulnerable.
Usually that doesn’t bother investors, so long as the bet is justified. However, myriad headwinds, particularly the ongoing supply-chain issues in the Canadian cannabis market, left the industry exposed. As individual weed firms delivered poor earnings results one after the other, Wall Street simply had enough. Thus began massive hemorrhaging for marijuana stock pricess.
Still, contrarian speculators may want to reconsider the green market for 2020. On a technical basis, several marijuana stocks appear to have found a bottom. Certainly, the rate of deceleration has narrowed substantially over the last few months. And many companies are showing signs of a possible recovery.
Yes, cannabis stocks remain risky ventures. That said, both legislative and social trends favor the weed space. For example, according to the Pew Research Center, two-thirds of Americans say that marijuana use should be legalized, reflecting years of steadily increasing tolerant opinions. And cannabidiol (CBD) is proving very popular following the Agriculture Improvement Act of 2018.
Prominent analysts view this year as the pivot after cannabis players have learned several hard lessons. With that, here are 30 marijuana stocks to make your portfolio green again!
Cronos Group (CRON)
With marijuana stocks still jostling for position in the sector’s starting phase, we’ve seen several shifts. In this open-ended arena, Cronos Group (NASDAQ:CRON) has emerged as the unofficial leader of the pack. CRON stock has benefited from key acquisitions thanks to strong backing from tobacco giant Altria (NYSE:MO).
That said, it’s been a rough ride for cannabis players. Dethroned from prior “buy” ratings, Cronos and its peers have wilted this year from higher expectations.
I’m not trying to dismiss these challenges. But over the long run, CRON stock appears a solid buy. For example, the acquisition of Redwood Holding Group gives the company exposure to the U.S. CBD market via Redwood’s Lord Jones brand.
This is a huge deal for Cronos since CBD is incredibly popular in the U.S. because it lacks the social stigma of marijuana: CBD has either no amount of THC, or just a trace amount.
Aurora Cannabis (ACB)
Roughly one year ago, Aurora Cannabis (NYSE:ACB) was streaking toward the heavens. At the time, enthusiasm among marijuana stocks to buy was strong due partially to the “newness” factor.
Quite simply, we’ve never witnessed an illegal market suddenly enter the mainstream with robust public support. Combined with Aurora’s focus on the far less controversial medical-cannabis business, ACB stock seemed like a lock.
Recently though, Aurora Cannabis has started to look decidedly weak among the marijuana majors. As many of its peers demonstrate signs of life, ACB stock is struggling to stay afloat. A poor financial picture combined with key executive departures make the investment thesis appear unsustainable.
Though incredibly risky at this point, ACB stock could benefit from the “rising tide” phenomenon. If conditions in the Canadian cannabis market — along with the international markets — improve, Aurora could jump based on the power of sheer emotional speculation.
Canopy Growth (CGC)
Canopy Growth (NYSE:CGC) is a perfect microcosm for the prior hype — and present reality — of marijuana stocks to buy. Before volatility massacred the sector, CGC stock was one of Wall Street’s darlings. With an aggressive expansionary strategy, Canopy appeared poised to go places.
It also didn’t hurt that alcoholic beverages giant Constellation Brands (NYSE:STZ) acquired nearly a 40% stake in CGC stock. Naturally, the cash influx helped Canopy’s balance sheet, giving it the confidence to expand.
However, CGC stock recently took a dive in the markets following an analyst warning. According to the report, Canopy is burning through cash “at an alarming rate.” As many of my InvestorPlace colleagues have pointed out, sustaining the expansion strategy would dangerously dilute shares.
Inevitably, Constellation lost patience with CGC, resulting in a shakeup at the top and the ousting of Canopy CEO Bruce Linton. The beverage giant later pushed David Klein to run the organization as CEO.
Best of all, Wall Street is loving the effort Canopy has exerted turning itself around. For its fiscal third-quarter earnings report, CGC greatly exceeded expectations. The positive news has even reverberated throughout the industry, boosting less-than-stellar names.
Touching $300 on an intra-day basis shortly after its initial public offering, Tilray (NASDAQ:TLRY) has certainly forwarded some impressive stats. Of course, winning in the markets is about more than just posting one-off pretty numbers. And for TLRY stock, the journey has been decidedly negative since touching that psychologically significant benchmark.
Indeed, the company posted one of the ugliest losses in the marijuana sector last year. Opening at $70 in 2019, TLRY stock proceeded on a largely unmitigated bearish trend from early March onward. By the end of December, equity had plummeted more than 75%.
Therefore, I can understand investors not wanting to touch TLRY stock with a ten-foot pole. However, a long-shot-but-believable case exists. With international interest in medical cannabis rising, it could provide Tilray a pathway to recovery. Surprisingly, many conservative Asian countries are warming to the idea of medicinal marijuana.
If you’re risk tolerant, you probably don’t want to remove TLRY from your “buy” list just yet.
Of the major marijuana stocks to buy, Aphria (NYSE:APHA) is a truly interesting case. A little more than a year ago, Aphria found itself in hot water after a damning short-seller’s report. That report accused the company of shady dealings via the acquisition of assets that largely benefited corporate insiders as opposed to shareholders. Not surprisingly, APHA stock tumbled on the news.
Furthermore, the controversy resulted in severe consequences. Part of these consequences involved the ousting of former Aphria CEO Vic Neufeld and co-founder Cole Cacciavillani. And for the most part, APHA stock responded with wild trading.
However, an intriguing point is that Hain Celestial’s (NASDAQ:HAIN) Irwin Simon stepped in as interim CEO, eventually taking over the job full time. For someone with such a strong professional repertoire, Simon’s taking a big risk with APHA stock.
Moreover, InvestorPlace’s Chris Markoch made the case that APHA stock could become a buyout target. As Markoch points out, Aphria is a profitable company, which is a rarity among marijuana stocks to buy. While still risky, I think there’s enough reward potential here to make APHA worthwhile.
GW Pharmaceuticals (GWPH)
I might get in trouble for listing GW Pharmaceuticals (NASDAQ:GWPH) among marijuana stocks to buy.
During last year’s Morgan Stanley Global Healthcare Conference, GW Pharmaceuticals CEO Justin Gover expressed his frustration over being mixed up with the pure weed crowd. In his view, GWPH stock is a biotech investment, and maybe that’s the case. However, GW’s flagship drug, Epidiolex, is a cannabis-derived therapy for treating seizures.
Thus, I’m sorry to say, but Gover’s protests sound like a pop star complaining about singing the same song repeatedly. Just give the audience what they want and collect your millions. And there’s no such thing as bad publicity.
Enough of my rant. A substantial tailwind underlining GWPH stock is the opioid crisis. Opening the eyes of millions of Americans, the raging controversy demonstrated that even well-meaning traditional pharmaceutical companies can distribute therapies that render startling consequences.
As a largely natural treatment, Epidiolex shows great promise, especially in this environment. Therefore, I’d keep GWPH stock in your shortlist of cannabis stocks to buy, even if that descriptor frustrates the CEO.
Curaleaf Holdings (CURLF)
It doesn’t take much analysis to realize that the cannabis stocks to buy from 2018 really didn’t pan out last year. Unfortunately, with the sector losing fiscal credibility, the Street demanded firm results.
When most companies couldn’t deliver, the entire market sub-segment suffered. That said, Curaleaf Holdings (OTCMKTS:CURLF) and CURLF stock are generally moving against the grain.
There’s no doubt that Curaleaf has been putting investors on a wild ride. But since the beginning of November 2019, CURLF stock is up nearly 35%. Of course, prospective buyers want to know, can this momentum continue?
With cannabis stocks, you can never make absolutely confident pronouncements. Nevertheless, Curaleaf has made key acquisitions, including GR Companies. More commonly known as Grassroots, it’s the largest private vertically integrated multi-state operator. The deal also gives Curaleaf exposure to markets it wouldn’t serve without the acquisition.
As with almost every name in the cannabis segment, CURLF stock is a speculative play. However, I do like its strategic moves to consolidate the dispensary business.
Green Thumb Industries (GTBIF)
Another compelling opportunity among over-the-counter traded marijuana stocks to buy, Green Thumb Industries (OTCMKTS:GTBIF) has also defied bearish expectations.
Despite a burst of bullishness in early 2019, GTBIF stock has incurred its fair share of volatility. Between the beginning of May and the end of August, Green Thumb shed 41% of its market value. Still, its subsequent stability — via a horizontal trend channel — gave investors food for thought.
One of the powerful attributes supporting GTBIF stock longer-term is its branded cannabis assets. Last year, Green Thumb made headlines when it acquired the vertically integrated For Success Holding Company. For Success’s claim to fame is Beboe, which is a premium cannabis brand unlike anything you’ve seen. Essentially, it’s the Williams-Sonoma (NYSE:WSM) of weed.
Now, that gives an edge to GTBIF stock because branding is what will distinguish top retail cannabis plays from the mediocre. That’s because growing marijuana isn’t rocket science, and thus you need a distinguishing factor to stand out.
Harvest Health & Recreation (HRVSF)
A vertically integrated cannabis operator, Harvest Health & Recreation (OTCMKTS:HRVSF) provides comprehensive coverage for botanical enthusiasts. Part of the challenge involved in converting the curious to cannabis is information: the who, what, where, when, why and most importantly, how.
Harvest Health’s website does a great job explaining the process for attaining medical cannabis cards in various states, ultimately helping the case for HRVSF stock through increased revenue opportunities.
Another point that’s alluring about HRVSF stock is the underlying company’s brands. Being vertically integrated, Harvest Health has multiple pathways to increase sales, such as retail stores and branded products.
For the latter category, Harvest features several oils, ointments and consumables, such as tinctures and CBD-infused protein bars. Especially amidst the vaping crisis, it’s very useful to have the ability to offer non-controversial cannabis platforms.
Sadly, it’s not all good news for HRVSF stock. Like other over-the-counter cannabis stocks to buy, Harvest shares have suffered badly last year. However, shares have been lively this year, possibly signaling an impending recovery.
Innovative Industrial Properties (IIPR)
In my opinion, Innovative Industrial Properties (NYSE:IIPR) is one of the more underappreciated marijuana stocks to buy.
As a cannabis-centric real estate investment trust, Innovative Industrial owns the distinction of being the first cannabis company listed on a major stock exchange. The honor is particularly conspicuous as the overwhelming majority of direct cannabis investments are over-the-counter affairs.
So far, IIPR is proving it can hang with the big boys at the New York Stock Exchange. In 2018, IIPR stock gained 39%, and in 2019, shares skyrocketed over 72%, making it one of the very few cannabis stocks to be in the black last year.
Frankly, I’m not terribly surprised that IIPR stock has outperformed. Sure, everybody wants to jump in on the sexy side of the cannabis business. But real estate is the foundation of this industry. As more state governments legalize marijuana, you can expect IIPR stock to continue rising higher.
Thanks to its high-potential longer-term strategies, Hexo (NYSE:HEXO) is an intriguing play. Unfortunately, like most other marijuana stocks, holding a position in HEXO stock has not been easy.
Shares cratered in 2019 as the Street teed off on the sector, and Hexo hasn’t done much to help itself. The company has had bleak report after bleak report, and there have been worries that Hexo is pretty much out of gas.
Fortunately, the company has bet big on Cannabis 2.0 and as the edible rollout begins in early 2020, it’s possible that Hexo can affect a turnaround.
Furthermore, Hexo offers intriguing upside potential from its partnership with Molson Coors Brewing (NYSE:TAP). With CBD-infused beverages and edibles becoming increasingly popular, HEXO is well positioned to ride out this burgeoning market.
With most cannabis stocks, the underlying companies are headquartered in Canada. But cbdMD (NYSEAMERICAN:YCBD) calls Charlotte, North Carolina home.
That has significant advantages in terms of building consumer engagement and trust. The company also provides jobs for the American people, which is a valuable component of the YCBD stock story.
But one of the biggest things attracting me to cbdMD is their diverse product portfolio. From oils to tinctures to edibles, the cannabis firm provides several avenues to enjoy the benefits of non-psychoactive CBD.
Let’s face it: You’re probably not going to roll up a joint and give it to your grandmother as an introductory platform. But a tincture or gummy? They’re much easier conversation pieces, further bolstering the argument for YCBD stock.
Now, YCBD stock was gutted earlier this year as reports indicate that the hemp/cannabidiol markets have excess supply. That might be the case with the present demand picture. But as CBD becomes a double-digit billion-dollar market in the next few years, this situation could change favorably for cbdMD.
Acreage Holdings (ACRGF)
One of the more established names in the legal marijuana market, Acreage Holdings (OTCMKTS:ACRGF) has generated more than a few headlines.
Over the years, Acreage has grown to one of the biggest cannabis firms in the U.S. As a vertically integrated name, investors of ACRGF stock have exposure to cultivation, production and dispensary facilities.
But those are really secondary reasons to own ACRGF stock. Instead, the key driver for Acreage is its deal with Canopy Growth. The latter will buy out the former for $3.4 billion. But here’s the catch: the U.S. first must legalize marijuana.
Logically, this implies that the U.S. must remove cannabis from its current Schedule I classification. Over the years, many legislators have tried, and so far, all have failed.
Historically, that suggests ACRGF stock would never meet the criteria. However, as controversial as marijuana is, full legalization isn’t completely out of the picture. That’s because the maligned plant represents the fastest-growing job market in the U.S.
Whether you believe a recession is on the horizon or not, we’re certainly living in economically sensitive times. Legalizing weed can help alleviate some of this pressure.
Trulieve Cannabis (TCNNF)
An increasingly common factor among marijuana stocks to buy is that the underlying companies emphasize the holistic nature of the cannabis plant, and not just its stereotypical use.
That distinction carries through with Trulieve Cannabis (OCTMKTS:TCNNF). A company that primarily focuses on the Florida dispensary market, Trulieve helps demystify medical cannabis, as well as provide patients with the assistance they need.
Like so many of the cannabis stocks we’ve covered, TCNNF stock has had a rough showing since the spring season of last year. However, shares hit a bottom in late August. Additionally, Trulieve’s equity is riding a support line that’s been in place since mid-October.
Trulieve is one of the few cannabis players that’s consistently profitable in terms of operating and net income. That really separates TCNNF stock from its major competitors, as they’ve failed to satisfy Wall Street’s raised standards. At least this Florida-based dispensary is pulling in the numbers.
Scotts Miracle-Gro (SMG)
Not all marijuana stocks have to be speculative affairs, as Scotts Miracle-Gro (NYSE:SMG) demonstrates. Ordinarily, you wouldn’t consider Scotts Miracle-Gro a weed company. However, let me be blunt: Whatever agricultural growth products Scotts comes up with, the marijuana industry desperately needs. And that’s the basic thesis for SMG stock.
As the cannabis sector continues to tack on new entrepreneurs and customers, Scotts’ revenue will only increase. Therefore, you can expect fertilizer, hydroponics and lighting systems inventory to decline more than usual. To be fair, Scotts doesn’t generate a majority of its sales from marijuana. However, this means that SMG is diversified and not dependent on the burgeoning sector.
The drama of last year delivered a perfect example. While so many marijuana stocks floundered, SMG stock was sitting pretty with a return of nearly 80%. Furthermore, shares are looking good so far this year, up 14% at time of writing.
If you’re serious about cannabis investing, SMG stock is a great hedge against inevitable volatility. Not only that, Scotts pays a dividend yielding 1.93%, something that very few marijuana companies can claim.
Similar to Scotts Miracle-Gro, AbbVie (NYSE:ABBV) is a renowned name with exposure to the marijuana industry. But unlike Scotts, whose products are coincidentally beneficial to cannabis companies, AbbVie has actively utilized the plant in its business.
The company’s drug Marinol, a cannabis-based drug, has been approved by the U.S. Food and Drug Administration. The treatment alleviates nausea or vomiting symptoms in chemotherapy patients. Marinol also helps people living with AIDS regain their appetite.
That said, I wouldn’t consider ABBV stock as this sector’s clean-up hitter. As pioneering as it is, Marinol only makes up a small portion of total revenues. Rather, use ABBV as a hedge against this market’s notorious volatility.
Also, ABBV stock has taken a big hit since early 2018 because of the various controversies impacting the healthcare segment. However, shares have been making a decisive comeback since September of 2019. Plus, with a 4.95% dividend yield, AbbVie looks interesting on its own merits.
Medicine Man Technologies (MDCL)
With the increased popularity of marijuana stocks, some names invariably fall off the radar. While most folks zero in on the major Canadian cannabis firms, you should also consider lesser-known names like Medicine Man Technologies (OTCMKTS:MDCL) for higher-risk, higher-reward plays. Last year, MDCL stock nearly doubled in market value.
As a consulting firm, Medicine Man hits virtually every corner of the weed business. From licensing and application support to maximizing cultivation output and turnkey facility solutions, the company offers critical services to marijuana entrepreneurs.
What makes MDCL more compelling than many of its smaller competitors is that we’re seeing substantive financial results. Revenue continues to grow on an annual basis since 2016, and this remains true on a quarterly basis as well. And in 2018, Medicine Man delivered a small profit for the year.
Don’t get me wrong: MDCL stock is still a speculative play. Its nearly 16% loss since the January opener is evidence. However, a recovering marijuana sector could help shore up the Medicine Man’s business.
Before we get into the details for MariMed (OCTMKTS:MRMD), I’m going to be straightforward. Based on the technical performance of MRMD stock, this is an extremely speculative play. In 2019, shares dropped nearly 81%. That’s not just bad for marijuana stocks; it’s just plain awful.
However, what attracts me as a contrarian to MariMed is its business. Like Innovative Industrial Properties, MariMed specializes in the administrative and operational properties of the cannabis industry.
Called seed-to-sale, MRMD helps cannabis entrepreneurs at all stages of their business. Currently, the company manages 300,000 square feet of botanical facilities, helping to make the case for MRMD stock.
Though risks abound, it’s very possible that additional individual states will legalize “full-strength” marijuana to varying degrees. Combined with entrepreneurial interest in the CBD space, MRMD stock could enjoy a recovery year in 2020.
Although not necessarily a household name here, Aleafia Health (OTCMKTS:ALEAF) is increasingly making its presence known up north. As one of Canada’s leading cannabis-based health clinics, Aleafia Health has put up some encouraging numbers.
Highlights for its most recent quarter ending Sep. 30, 2019 included medical cannabis sales up 43% sequentially and adult-use cannabis sales up 53%. Additionally, total expenses decreased 30% quarter-to-quarter.
Impressively, the company has seen over 65,000 clinic patients. That’s particularly important as ALEAF stock is also levered to the indoor and outdoor cultivation business.
Additionally, Aleafia invests heavily in research and development for medical cannabis formulations. Currently, their research focuses on the treatment of opioid dependence, as well as chronic illnesses such as pain, insomnia, anxiety and eating disorders.
Fundamentally, there’s a lot to like about ALEAF stock. In my view, it has significant upside potential. However, due to the fallout among cannabis stocks, ALEAF stock was caught in the downdraft.
Admittedly, ALEAF stock is an ultra-risky name so only those that can handle volatility need apply. However, shares appear to have found a support line recently, so they do entice.
Charlotte’s Web (CWBHF)
One of the benefits of full legalization in the U.S. is that it would give American companies opportunities they normally wouldn’t have.
Fortunately for Charlotte’s Web (OCTMKTS:CWBHF), it is headquartered in Colorado, which has long been a green-friendly state. Coincidentally, CWBHF stock was one of the strongest marijuana stocks to buy up until late summer of last year. Since then, shares have taken a hit.
That’s largely because the CBD market may have gotten ahead of itself, producing more cannabidiol than was necessary. Still, this may be an opportunity for CWBHF stock.
For one thing, Charlotte’s Web presents a clean, wholesome image. The company has done an excellent job mitigating the stereotypical representation of the cannabis plant. That really helps toward evangelizing the benefits of CBD- and hemp-based treatments, potentially bolstering shares.
Another tailwind is the product diversity. Many are curious about CBD, but they may not want to hit a bong or roll a joint. Charlotte’s Web offers consumables, oils and creams, facilitating the cannabis message innocuously. It’s a smart approach, one that could boost CWBHF stock this year.
New Age Beverages (NBEV)
One of the more interesting names within the cannabis market is CBD-beverage specialist New Age Beverages (NASDAQ:NBEV). According to Canaccord Genuity (OTCMKTS:CCORF), cannabis-infused beverages could become a $600 million industry by 2022. Unfortunately, this hasn’t translated to solid returns for NBEV stock.
Like many cannabis names, New Age Beverages saw its equity take a huge beating last year. Though the concept is enticing, CBD is still a relatively new phenomenon, and the rush of production following the Agriculture Improvement Act didn’t immediately find demand.
Nevertheless, NBEV stock has moved substantially higher this year. And in my opinion, it’s more than just the law of small numbers at work. According to other, more recent CBD beverage forecasts, this market segment could hit $1.4 billion by 2023. If so, that would justify the recent bullishness in shares.
Rocky Mountain High Brands (RMHB)
Ordinarily, beverage makers aren’t the best place to put your money. Competition is extraordinarily fierce, and minnows are easily swallowed up by the stalwarts in the business. But if you have some gambling funds you want to play with, take a look at Rocky Mountain High Brands (OTCMKTS:RMHB).
Like the previous idea New Age Beverages, Rocky Mountain’s claim to fame is its hemp-infused drinks, specifically its energy drinks. The potential upside opportunity lies within its competitors’ ingredients, which are often saturated with sugar. Rocky Mountain drinks provide a clear alternative for health-conscious consumers, which could play out well given market sentiment.
That said, you have to be very careful with RMHB stock. Currently, shares trade for less than 4 cents. This naturall raises eyebrows. If you acknowledge the risks ahead of time, though, RMHB just might surprise, especially since it appears to have bounced off a recent low.
When I first wrote about 30 marijuana stocks to buy, 30 states allowed cannabis for medicinal purposes, while nine permitted recreational use. Now, 39 states have mixed marijuana laws, with 10 states plus the District of Columbia allowing recreational use. In short, the days of holding onto a draconian policy toward weed are coming to an end.
But where does one get advice on this unprecedented industry? That’s where AmeriCann (OTCMKTS:ACAN) comes in. Primarily a real estate and facilities services company, AmeriCann offers logistical and administrative support for “weed-preneurs.” In addition, ACAN has a licensing procurement division that specializes in winning lucrative cannabis licenses for their clients.
Like many top marijuana stocks, ACAN stock experienced substantial volatility last year. Today, shares are well below the critical $1 mark, so risks abound. But if the cannabis industry continues to grow — and that’s not an unreasonable assumption despite some birthing pains — AmeriCann’s business will remain relevant.
CV Sciences (CVSI)
In the long run, one of the most exciting catalysts for the cannabis industry is the potential transition of society viewing these botanicals as therapeutic platforms as opposed to recreational. If that happens, CV Sciences (OTCMKTS: CVSI ) and CVSI stock could enjoy significant upside.
Currently, the pharmaceutical company is developing synthetic CBD-based drugs to support the cessation of smokeless tobacco use and addiction. In years past, such endeavors seemed a long shot due to the FDA’s tough stance on cannabis. However, drugs like the aforementioned Epidiolex gives CVSI stock some hope.
Although the potential for CV Sciences excites the contrarian part of our brain, be warned that this is not an easy gamble. At the start of 2019, CVSI stock was trading hands above $4. Today, they’re under $1.
Still, shares appear to have found technical support since early December, tempting a bet.
Village Farms International (VFF)
Because I’m listing Village Farms International (NASDAQ:VFF) in a list of marijuana stocks to buy, you might think the name is a double entendre. Surprisingly, though, that’s not the case.
Initially, Village Farms started off as a hydroponic grower of innocuous, everyday vegetables like cucumbers and tomatoes.
However, hydroponics have other botanical uses. And with legalization momentum gaining speed, it only made sense for Village Farms to expand into CBD-rich hemp. Last year has been a particularly busy one for the company, with Village Farms entering a joint venture with Arkansas Valley Hemp to start growing hemp in Colorado. Moreover, it has a joint venture with Emerald Health Therapeutics (OTCMKTS: EMHTF ) under Village Farms’ Pure Sunfarms brand.
Under the latter joint venture, the entity can grow 75,000 kilograms of cannabis annually. That would make it one of the best-performing Canadian cannabis producers. Certainly, it makes VFF stock an intriguing pick, especially because the company is getting the business done.
At the same time, VFF stock has been trending negatively since mid-May of 2019. Therefore, only bet with money you can afford to lose.
Wildflower Brands (WLDFF)
One of the most important goals for any “weed-preneur” is to distinguish themselves from the competition. I wholeheartedly concede that this is easier said than done. To most lay observers, weed is weed. However, Wildflower Brands (OTCMKTS: WLDFF ) aims to change that perception.
Focusing on the health and wellness segment, Wildflower Brands has done one thing exceptionally well. Rather than build out their footprint to ridiculous levels, management has focused on sustainable growth. And on a percentage basis, the organization has among the most impressive sales growth rates in the business.
That said, market pressures have not been kind to WLDFF stock. Last year, shares tanked 60% as Wall Street lost patience with the industry.
However, the cannabis sector is generally applying the tough lessons it has learned in 2019. With major players like Canopy Growth leading the charge for a fresh vision this year, WLDFF stock could be one of the smarter risky bets.
Mentor Capital (MNTR)
Undoubtedly, one of this sector’s toughest barriers to entry is funding. Most mainstream banks and financial institutions won’t touch cannabis companies for completely understandable reasons. Because cannabis falls under Schedule I classification, the federal government could crack down at any moment. It’s an underlying risk that sends shivers to bankers.
Thankfully for weed entrepreneurs, Mentor Capital (OTCMKTS:MNTR) has a much more open mind. Through its unique incentive structure, Mentor provides smaller cannabis companies necessary funding. But what makes Mentor different from its competitors is that it leaves total operating control to the client-company founders. It’s a refreshingly symbiotic relationship, especially in this business.
Admittedly, that’s where the good news ends for MNTR stock. Last year, shares plummeted 66%. And while MNTR has stabilized in December, its subterranean price point makes it suspect.
However, you can also look at it this way. Over the last few months, Mentor Capital shares have looked spirited. This dynamic could continue on a positive trajectory is the weed sector finds traction.
Novus Acquisition & Development (NDEV)
Financial institutions aren’t the only mainstream organizations that take a dim view of marijuana. Several health insurance companies refuse to cover costs associated with cannabis treatments and therapies. Cynically, I would point out that insurance providers don’t profit much from non-pharmaceutical solutions, but either way, marijuana-therapy patients are left with sizable bills.
To address the rising costs associated with cannabis care, Novus Acquisition & Development (OTCMKTS:NDEV) offers the first marijuana-based health plan. Novus doesn’t just stop at common medical applications, either. They offer comprehensive plans for hemp and cannabidiol, alternative therapies and even dental and optical coverage.
But why I’m really intrigued by NDEV stock is the underlying company’s pioneering spirit. As the marijuana industry continues to boom, you can expect similar businesses to sprout up in the future.
With that said, NDEV stock is a prime example of a good idea that’s perhaps ahead of its time. Sadly, Novus’ valuation was gutted last year, remaining a stock best suited for gamblers.
Medical Marijuana (MJNA)
Medical Marijuana (OTCMKTS:MJNA) is literally a company of firsts. In 2009, Medical Marijuana became the first publicly traded cannabis company in the U.S. A year later, it pioneered the direct-sales business model for weed products. A little bit down the road in 2012, MJNA became the first company to introduce cannabinoid foods and supplements to the mainstream retail market.
As a result, Medical Marijuana represents a historical anchor among marijuana stocks. To its credit, management was never content on merely being a pioneer. Instead, the company has been highly acquisitive over the years, building a robust business portfolio. Furthermore, it is expanding internationally as legalization sentiment crosses borders.
Unfortunately, that message hasn’t resonated with the markets, sending MJNA stock to around two pennies. One of the reasons is that the company has lost fundamental credibility, incurring increasingly heavy earnings losses in recent years.
Thus, the play here is that MJNA stock may recover in a return of bullish sentiment. However, it is absolutely risky, and you should only play this with “stupid” money.
Real Brands (RLBD)
And finally, we’re down to our last idea for cannabis stocks to buy. If you’ve read this far, I congratulate you. With over 5,400 words, you’ve read the equivalent of 24 double-spaced pages. That, my friends, is lot of weed.
So, with this last pick, I’m going to share with you an opportunity that you may not have heard about. Real Brands (OTCMKTS:RLBD) CEO Jerry Pearring sent me a note about his organization, which specializes in CBD vaporizers, ointments, infused water and consumable therapeutics. While RLBD stock isn’t a household name, Pearring has extensive leadership experience in the consumer products industry.
As you might expect from lesser-known securities, RLBD stock features both sharp rallies and corrections. That said, I do find the consumable and direct-application therapeutic categories compelling, as they afford CBD evangelism via inoffensive platforms.
Similar to any over-the-counter equity, you want to be careful with RLBD stock. Nevertheless, there might be substantial upside here, especially if sector sentiment returns.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights to the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he is long ACB, HEXO, MRMD and ALEAF.