LONDON, December 19, 2017 /PRNewswire/ --
The marijuana market is poised to see the biggest investor bull rush of the 21st century, and gaining exposure to this burgeoning industry is one of the most important investment questions of our time. Included in today's commentary: Canopy Growth Corp. (OTC: TWMJF) (TSX: WEED), Scotts Miracle-Gro (NYSE: SMG), Aurora Cannabis Inc (OTC: ACBFF) (TSX: ACB), Cronos Group Inc (OTC: PRMCF) (TSX-V: MJN).
In the U.S. alone, the marijuana market is set to reach $25 billion by 2020 despite recreational use being legal in only two states. The Canadian market is forecast to hit $8 billion, and is set to see federal legalization implemented within a matter of months.
Unsurprisingly, the legalization of this enormous market has already brought investors incredible returns - with the twelve largest companies seeing an average gain of 332 percent over the course of a year. And as the recreational use of marijuana in Canada gains country-wide approval in the coming months, these stocks are set for another big spike.
The biggest question facing investors in 2018 is how to isolate those companies with the most exposure to these gains, and how to gain access to both Canadian and U.S. markets.
With all of that in mind, here are cannabis stocks that you should keep an eye on in 2018:
Canopy Growth Corp. (OTC: TWMJF) (TSX: WEED.TO)
With a market cap of $3.79 billion, Canopy Growth Corp. is a giant in this space and has seen significant gains in the past year - with its stock price more than doubling since September.
As the federal legalization of recreational cannabis in Canada approaches, this is undoubtedly one of the companies to watch. With new facilities recently licensed at its Smiths Falls flagship project, this giant is constantly expanding its growing capabilities. As a result of this growth, Canopy Growth Corp. became the first Cannabis company to be added to the S&P/TSX Composite Index.
With its reputation as 'the biggest weed producer in the world', investors may look to Canopy Growth as one of the safer names in the space. While there will likely be companies seeing higher returns, there is undoubtedly value in having one of the Big Weed stocks in your portfolio next year.
Just as in any industry, when a bull run is underway, investors are sure to see returns from the industries biggest players. As long as demand continues to surge as it has been, Canopy Growth will be there to dominate supply.
Investors can expect to see the growth trend here continue into the New Year and gain a further boost when Canada's next big piece of cannabis legislation is signed.
For investors interested in gaining exposure to the entire North American market, Cannabis Wheaton is a company unlike any other.
This innovative company is doing what Silver Wheaton has done for the mining industry and what Netflix has done for movies - Cannabis Wheaton is streaming pot.
As demand soars and companies attempt to get in on the biggest bull run of the century, Cannabis Wheaton is providing a route to the top of the industry for new and existing growers. It is a royalty-based business that is entirely new to a market that is set to explode in 2018.
This business model removes the risks associated with betting on a single producer, instead giving you access to a much larger portion of the industry. And the team putting those deals together is made up of some of the biggest names in the space.
This one-of-a-kind company has already lined up 15 partners, with 17 facilities-for 1.4 million effective square feet of growing acreage. In return, they get minority equity interests and a portion of the pot produced.
As recreational use is legalized across Canada in 2018, Cannabis Wheaton will be a significant catalyst in a space that is already struggling to keep up with soaring demand.
And on top of all of that, Cannabis Wheaton already has 39 clinic relationships, and it is growing fast, with access to over 30,000 registered medical marijuana patients.
This one-of-a-kind company is providing a win-win situation for investors, with lower risk and diversified exposure to the hottest market in 2018.
Traditional licensed cannabis producers are likely to benefit during the boom, but Cannabis Wheaton's innovative business strategy is giving investors an edge in this space.
The recent $15-million purchase of common shares of ABcann Global Corporation in August was a taste of things to come. Upon completion of a further $15 million investment and capital to contruct an expansion, the deal will add another 50,000 square feet of pot production to ABcann's portfolio. Cannabis Wheaton will get 50 percent of the production from ABcann's 50,000 square feet of new cultivation for almost 100 years.
This is a business and model to watch very closely.
Scotts Miracle-Gro (NYSE: SMG)
Scotts Miracle-Gro is a 'pick and shovel' company for the marijuana industry and is yet another way investors can look to play the boom. As the race for supply heats up, this industry leader will be at the center of it all, providing investors with a fantastic opportunity.
SMG is currently trading at $102.56 having experienced impressive growth for the last five years. With a market cap of nearly $6 billion, it is a name to be reckoned with in one of the hottest markets in the world right now.
Its success so far has come largely from outside the marijuana sector, becoming a household name in everything from pest deterrent to weed killer. But now this giant in hungrily eyeing the marijuana market and is manufacturing a growing collection of products for us in hydroponic growing - a huge section of the pot market.
Hydroponics is the process of growing plants without soil, and SMG has a wholly owned subsidiary, Hawthorne Gardening Company, that is focused on hydroponics as 10 percent of its total sales currently - a figure that will grow at a rapid rate. Year-over-year, this segment has organically grown 20 percent, but Scotts is also actively acquiring companies in the space to boost that figure further still.
What SMG offers, then, is a way to gain unique exposure to the marijuana industry, without going all out for direct pot stocks.
Aurora Cannabis Inc (OTC: ACBFF) (TSX: ACB) which is a producer and distributer of medical marijuana across Canada. The company, formally Prescient Mining Corp, is a Vancouver-based business founded a little over one decade ago. Aurora's main objective is to bring medicine to the people reliably and economically, which sets it aside from many of its major competitors.
Cronos Group Inc (OTC: PRMCF) (TSX-V: MJN.V) is another Toronto-based cannabis company with a lot of ambition. The company has prioritized its production acquisitions in order to provide geographically diverse products. Loaded with values, this company is comprised of passionate and focused employees.
One of the primary objectives of Cronos Group is to destigmatize the medical use of marijuana and bring medicine to those who need it.
By. Meredith Taylor
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