Marijuana stocks may not have had a stellar year in 2018. But, this year could easily bring better news as things continue to expand and more new marijuana markets open up.
Canada became the first country to legalize recreational weed last October. This development has, undoubtedly, cemented the way for billions of dollars in legitimate annual sales and has helped the pot market to come out from the shadows and into the limelight as a reliable business model.
A number of developments happened in the United States as well. President Trump signed the Farm bill into law last November, legalizing hemp and cannabis-based products throughout the country.
To top it off, the U.S. Food and Drug Administration approved the first cannabis-derived drug, with quite a number of U.S. states giving green signal to cannabis in some capacity last year. Nearly two-thirds of all states in the U.S. have legalized medical marijuana and 10 of them, in fact, allowed adult consumption.
Companies in this up-and-coming industry, thus, have taken aggressive steps to raise cash, go public and list their shares on the U.S. exchanges to access capital. Hence, looking at some of the stocks from this fast-growing industry doesn’t seem like a bad proposition.
Marijuana Sales to Skyrocket
According to Arcview Market Research and BDS Analytics, global consumer marijuana outlays are estimated to climb 38% to $16.9 billion this year, up from a projected $12.2 billion last year, $9.5 billion in 2017, and $6.9 billion in 2016. Additionally, compounded global annual sales growth of cannabis from 2017 to 2022 is expected at $31.3 billion.
While legalization of marijuana in several U.S. states and in Canada will surely help cannabis growth to hit such a promising number by 2022, a number of dispensaries have been given the permit to sell legalized cannabis. At the same time, mergers and acquisitions between large beverage, tobacco, pharma and cannabis companies should certainly help the weed market grow. After all, deal making will diversify their product portfolio and propel growth.
Investment bank Cowen & Co said that the legal weed market is expected to reach a value of as much as $75 billion by 2030. This indicates that there are plenty of opportunities for investors to make money from both direct and subsidiary players.
Fast-Growing Marijuana Stocks to Consider in 2019
As excellent prospects are expected to make marijuana stocks winners this year, take a look at these selected few poised to move north this year. All these stocks possess at least a Zacks Rank #3 (Hold) right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GW Pharmaceuticals (GWPH - Free Report) focuses on discovering, developing, and commercializing cannabinoid prescription medicines using botanical extracts derived from the cannabis plant. The cannabinoid drug maker is expected to see an uptick in sales this year, especially after its lead drug, Epidiolex, became the first cannabis-derived drug to gain approval from the FDA.
Earnings for GW Pharmaceuticals, a Zacks Rank #2 (Buy) stock, is projected to gain 5.13% in the next quarter. The company has outperformed the Medical - Products industry so far this year (+56.5% vs +9.4%).
Innovative Industrial Properties (IIPR - Free Report) , also a #2 (Buy) on the Zacks Rank, focuses on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities.
With more states in the United States giving cannabis the green light, Innovative Industrial Properties has incentive to acquire additional properties. The stock’s expected earnings growth for the current year is 64.2%, and the company has outperformed the REIT and Equity Trust - Other industry on a year-to-date basis (+44.2% vs +13.6%).
KushCo Holdings (KSHB - Free Report) operates a creative design agency for cannabis and non-cannabis clients that provide brand strategy, design and marketing, Web application development, and e-commerce solutions.
KushCo, by the way, had acquiredSummit Innovations known for manufacturing hydrocarbon gases. These gases are necessary for converting cannabis plants into oils, and we all know that oil generates more profits than traditional dried flower.
Next year’s earnings could grow over 100%, and the stock, a #3 (Hold) on the Zacks Rank, has gained over 14% since January.
Canopy Growth (CGC - Free Report) engages in growing, possessing, and selling medical cannabis in Canada. In fact, in terms of aggregate sales, Canopy Growth may find itself at the top spot. The company’s annual production comes in at more than 500,000 kilograms and is positioned to increase on branding and partnerships.
While shares of Zacks Rank #3 (Hold) CGC have only gained around 8.5% this year, it has a huge cash stockpile that far surpasses its peers thanks to Constellation Brands’ (STZ - Free Report) hefty $4 billion investment made last year.
Zacks 2019 Marijuana Investors’ Summit: In addition to the companies you learned about above, we invite you to learn more about investing in pot stocks. On Tuesday, April 16, our team of experts will reveal what we believe is the single best way to make money from legal marijuana. Register Now for Free >>
Register Now for Free >>
Constellation Brands Inc (STZ) : Free Stock Analysis Report
GW Pharmaceuticals PLC (GWPH) : Free Stock Analysis Report
Innovative Industrial Properties, Inc. (IIPR) : Free Stock Analysis Report
KUSHCO HOLDINGS, INC. (KSHB) : Free Stock Analysis Report
Canopy Growth Corporation (CGC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research