Marijuana Stocks: Our New Strategy

Marijuana Stocks invests in companies in the budding marijuana industry: companies that produce and sell legal medical marijuana, legal recreational marijuana, and companies that sell products or real estate, or provide services to marijuana companies. The Marijuana Stocks strategy also invests in so-called weed stocks of biotech or pharmaceutical companies with cannabinoid products or pipeline candidates.

We picked these 11 individual weed stocks out of the largest marijuana ETFs, eliminating companies that are not listed on U.S. exchanges, and any with a large tobacco focus or unrelated pharmaceutical business. Three companies are based in the UK or Canada, but most of the strategy’s holdings are based-in-the-USA marijuana stocks.

Keep reading to learn more about the 11 companies the Marijuana Stocks strategy invests in.

Canopy Growth Corporation (CGC):

Canopy Growth is a leading producer of medical cannabis. Now that Canada has legalized recreational marijuana, Canopy plans to enter that business too. The company operates a collection of diverse brands and curated strain variety, supported by over half a million square feet of indoor and greenhouse production capacity. It is Canadian company publicly traded on the NYSE.

This article from Motley Fool has more information on Canopy Growth.

Scotts Miracle-Gro Company (SMG):

Scotts Miracle-Gro offers industry-leading lawn, garden and outdoor living products & services. While Scotts’ primary business is the global consumer lawn and garden market, the marijuana-focused part of their business is growing. Many marijuana growers use Scotts’ subsidiary company products (Sunlight Supply & Hawthorne Growing Company) for horticulture, organics, hydroponics, and lighting supplies.

This article from CNBC has more info on SMG’s move into the cannabis market.

GW Pharmaceuticals (GWPH):

GW is a biotech that has one FDA-approved medical cannabinoid product, Epidiolex® for childhood epilepsy, and another medical cannabinoid product, Sativex® Oromucosal Spray, approved for use in several countries. The oral spray treats spasticity (muscle tightening) caused from multiple sclerosis. The company is licensed by the UK Home Office to work on a range of controlled drugs for medical research purposes and has more products in its pipeline.

This article from Fortune has more info on the future of GW Pharmaceuticals.

Cronos Group Inc. (CRON):

Cronos Group is a vertically integrated cannabis group in Canada. They supply medical cannabis in Canada, sell cannabis for the now-legal Canadian recreational market, and they’re targeting the global cannabis market as well. They have operations in four continents. One way the company is expanding into the recreational market after Canada’s legalization is a recent partnership with California’s MedMen to develop branded consumer products.

This article from Motley Fool has more information on Cronos.

Cara Therapeutics Inc. (CARA):

Cara Therapeutics is a U.S. biotech company with a pre-clinical candidate cannabinoid-receptor agonist, CR701. Cara is developing a new class of medicine called Kappa Opioid Receptor Agonists (KORAs). KORAs target a completely different receptor in the body, the kappa opioid receptor, to treat pain in a new way. Their lead pipeline product, CR845 has shown in Phase 2 clinical trials promising relief of pain and pruritus (itching) without many of the traditional side effects that you see with mu opioids (morphine, oxycodone and hydrocodone) and NSAIDs (ibuprofen).

You can read more on Motley Fool.

Insys Therapeutics (INSY):

INSYS Therapeutics has an FDA-approved cannabinoid product approved for use in cancer patients. The company is recognized for its advances surrounding a progressive line of innovative drugs and novel drug delivery systems that address unmet medical needs and improve the quality of patients’ lives. Their clinical team is developing therapies for a variety of medical conditions including cancer pain, nausea and vomiting caused by anti-cancer medicine (chemotherapy) and loss of appetite in people with AIDS.

Read more about Insys’ recent success on Motley Fool.

22nd Century Group (XXII):

22nd Century Group (XXII) has created THC-free cannabis, an excellent source of medically important cannabinoids without the psychological effects. Additionally, in collaboration with the Company’s university research partners, Botanical Genetics, XXII is working to optimize Hemp varieties for various climates around the world. 22nd Century has the exclusive rights to commercialize the plants arising from these collaborative projects in the United States. Also, as a result of 22nd Century Group’s proprietary genetic engineering technology, they are able to grow tobacco with up to 95% less nicotine than conventional tobacco. The applications for this technology are extraordinary; in independent clinical studies, their very low nicotine (VLN) tobacco has proven remarkably efficient as a smoking cessation aid.

Read this Business Wire article to read more about a recent study on their VLN tobacco.

Corbus Pharmaceuticals (CRBP):

Corbus Pharmaceuticals Holdings, Inc. makes Lenabasum, a product that just received FDA-approval as an orphan drug on July 20, 2018. From the press release: The U.S. Food and Drug Administration (“FDA”) has granted Orphan Drug Designation (“ODD”) to lenabasum, its novel, synthetic oral endocannabinoid-mimetic drug, for the treatment of dermatomyositis (“DM”). More specifically, Lenabasum is a synthetic, oral, small-molecule, selective cannabinoid receptor type 2 (CB2) agonist that preferentially binds to CB2 expressed on activated immune cells and fibroblasts. Corbus is a pharmaceutical company focused on the development and commercialization of novel therapeutics to treat rare, chronic, and serious inflammatory and fibrotic diseases.

Read this Globewire press release about Lenabasum’s recent FDA approval.

Innovative Industrial Properties (IIPR):

Innovative Industrial Properties, Inc. is the pioneering real estate investment trust for the medical-use cannabis industry. Founded in December 2016, they are the first publicly traded company on the New York Stock Exchange to provide real estate capital to the medical-use cannabis industry.

You can read more about Innovative Industrial Properties here.

Zynerba Pharmaceuticals Inc. (ZYNE):

Zynerba Pharmaceuticals is dedicated to the development and commercialization of innovative transdermal pharmaceutically-produced cannabinoid treatments for rare and near-rare neuropsychiatric conditions in patients with high unmet medical needs. They believe their products will provide new treatment options for patients as well as additional treatment options for patients not currently receiving adequate relief or otherwise experiencing intolerable side effects from current treatment regimes.

Read more about Zynerba on theis Motley Fool article.

Tilray Inc. (TLRY):

Tilray is a global leader in medical cannabis research, cultivation, processing and distribution. A proud pioneer, they are the first Good Manufacturing Practice (GMP)-certified medical cannabis producer to supply cannabis flower and extract products to tens of thousands of patients, physicians, pharmacies, hospitals, governments and researchers on five continents.

Read this Forbes article to find out more about Tilray Inc.

Could the Marijuana Stocks strategy be a win for your portfolio?

President Donald Trump said earlier this year that he would “probably” support a new bill that would return decision-making on marijuana laws to individual states, limiting the risk of an industry shut-down in the United States. Cannabis companies considered his statement a “win” for the industry. Plus, medical marijuana is currently legal in 30 states and D.C., and recreational marijuana is legal in 8 states and D.C., and these numbers are growing. However, keep in mind that Federal law prohibits the use and possession of cannabis for any purpose, and Federal laws have the right to override State laws.

** The last-twelve-months performance caveat: in the last year ending July 20, 2018, the strategy returned 19.07% (gross). However, two of the 11 companies IPO’d in the U.S. market within 2017 or 2018. Tilray Inc. IPO’d most recently, on July 19, 2018. Thus, past performance was calculated by adding each company to the strategy, and its performance, once it IPO’d on a U.S. Exchange. As of July 20, 2018, by contrast, the strategy is invested in all eleven marijuana stocks. As a result, performance prior to this date, as shown above, is not reflective of the returns of the 11 stocks in the Marijuana Stocks strategy. Please email us at support@ibillionaire.com if you have any questions.


Originally published at learn.ibillionaire.com on July 20, 2018.

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