Bear and Bull

If you are seeking the next potential boom market to invest in then investing in marijuana related stocks could be of interest.  A recent survey shows that more people would now be willing to invest $10M in Cannabis over cryptocurrencies.

 

 

Here are a few stocks to look at which are directly involved in the cannabis sector and which can be traded at ayondo:

  • Tilray
    With a market cap of over $12 billion it has become the most valuable marijuana company in the world. They focus on the production, research, cultivation and distribution of medical cannabis and cannabinoids. Its product lines include dried cannabis and cannabis extracts.
  • Canopy Growth
    A Canadian company with a vast distribution network capable of producing at least 300 tonnes of dried marijuana a year.
    Over the past year Canopy Growth has seen its share price go from 13 Canadian Dollars to just over 60 Canadian dollars, an impressive 360%.
  • Scotts Miracle
    Although a traditional gardening supply company, over the past few years they have been linked to the marijuana industry by way of vertical integration. Scotts Miracle recently purchased Sunlight Supply for $450 million which is a hydroponics distributor.
  • Cronos Group Inc
    Operating in Canada, Germany and US Federally legal jurisdictions, Cronos are involved in the production and sale of Cannabis. In the space of one year the company share price has jumped from $2 to just under $10, giving it a market cap of $1.64 billion.
  • GW Pharmaceuticals PLC
    A biopharmaceutical company, which engages in the discovery, commercialisation and development of novel therapeutics from cannabinoid products. Unlike many firms they are currently focused on the medicinal use rather than that of recreational use.
    Alternatively if you want to have exposure to the wider marijuana industry then investing into the ETF is the alternative.
  • ETFMG Alternative Harvest
    This index tracks the performance of those companies across globe who are involved exclusively in the legal activities of cannabis for both medical and non-medical purposes.
    Since August 2018, this ETF has gone from $25 to just under $40, a return of nearly 60%.
  • Diageo
    The world’s largest distiller is currently in talks with three different Canadian cannabis companies over a partnership option to create drinks.

One of the main distinctions to look at is the two sides of the cannabis market – medical cannabis and consumer products. With the big pharma’s such as Pfizer and Glaxxo shying away from medical marijuana it will be interesting to see if some smaller pharmaceuticals are able to create patentable products to strengthen their market position. With drug research and development being so regulated however we should certainly see the initial instant impact mostly reflected in retailers of consumer products. As cannabis is becoming more and more accepted this may be something to get involved in at the start of its real global push.

This provides you with three different investment options:

Direct product investment – Investing into retail farms/growers that are providing the product for retail consumption.

Scientific Development Investment – With Cannbidiol (CBD) becoming increasingly more common in medical products and being studied more closely for its success in treatment for cancer, epilepsy and anxiety to name a few, this provides a more diversified way of investing unless the firm is specifically a medical marijuana firm.

Fringe Investing – This is likely to be the most risk free way of gaining exposure as you can invest in firms which are providing significantly more than just their marijuana products however still gain exposure with the likes of Coca Cola or Diageo. Alternatively looking into providers of farming equipment or hydroponics equipment for plant growing can gain you exposure. As the market continues to grow these necessary materials will increase in demand and provide opportunity for fringe investments.

The above-mentioned market views and content reflect only the opinion of the author, not that of ayondo. This service is for informational purposes only and does not constitute advice or investment advice.

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