Which Marijuana Stocks Should You Be Watching?
As legal consumption explodes in the US cannabis market, you need to be looking out for the perfect new industry for investment.
With support for federal legalisation of marijuana at an all-time high, these stocks should be on everyone’s watchlist. Data from The Cannabis Industry National Report predicts that the US marijuana market could be bringing in $24 billion per year by 2025. It’s not just long-term legislation changes that should be influencing your decision, the cannabis market is already booming in some states that have already legalised, and the industry has many listed companies with a track record already.
Canopy Growth Corp.
One of the biggest names in the industry, Canopy has the boon of being in Canada, a country that completely legalised recreational consumption late last year. After a spree of acquisitions, Canopy has bolstered it’s market cap to an impressive CAD$21.87 billion, it’s share price tripling in one 52-week period.
Despite these acquisitions and some heavy investment, the company still holds significant amount of cash while servicing a proportionally small debt load. If you want your portfolio to take a dip in the cannabis industry but want to stick to the lowest-risk, this is probably the company for you.
AbbVie Inc.
Stepping away from the growing side of the business, AbbVie is involved in a range of pharmaceutical products, but has recently been working on a synthetic cannabis-based drug designed to compliment cancer treatment as a mitigation for nausea. This is already FDA approved so you’re not quite as reliant on speculation as you might be with other companies.
It’s worth remembering that when you invest in this company, your portfolio will be gaining much more exposure to the pharmaceuticals market in general than the marijuana market. Make sure you do your due diligence on AbbVie’s other products to ensure you’re confident in putting your money behind this company.
Aurora Cannabis Inc.
Slightly smaller than Canopy but also Canadian based, Aurora has been following a very similar pattern of acquisitions. Rather than recreational, Aurora focuses on medical cannabis, including supplying to medical cannabis providers in the European Union. Not just limited to the product itself, they also work in providing the appropriate growing equipment to companies entering the industry globally.
With a debt much more sizeable than that of it’s big brother Canopy, it will be important to keep an eye on Aurora’s cash flow over the coming years to ensure it utilises its newly acquired companies well.
