Investing in cannabis stocks can be a daunting and confusing process. With provincial regulations and federal sanctions hanging over the head of investors, making an informed investment decision is difficult.
Is euphoria driving the price of cannabis stocks higher and higher? Or is there more to it?
Legalization is moving forward around the world, and 2018 could really be the “year of the green” when it comes to cannabis stocks. In that spirit, here are five companies to watch in the New Year.
From world leaders to emerging IPOs, learn about the growing legal cannabis industry.
Also, check out how much North American marijuana stocks soared after California legalization.
Canopy Growth: The World Leader
Canopy Growth is the world’s largest licensed producer of marijuana. They have the largest market share in Canada and recently received a $250 million investment from Constellation Brands (STZ). In fact, they continue to seize market share around the globe.
Although the stock has slowed recently, the long-term outlook is still positive. Canopy is expanding with deals in Denmark, Chile, Australia, and Germany. Canopy has the benefit of being a first mover in the Canadian industry and is already expanding in the first years of a multi-decade growth cycle.
Aurora Cannabis: Business Plan Excellence
Aurora Cannabis has executed well on a business plan focused on becoming a global leader. They have pioneered new solutions from CBD formulas to extraction technologies. In addition, Aurora has strengthened its presence with investments in Radient Technologies, Hemp Co., and Cann Group. The company has a balance sheet with $300+ million in cash.
International deals have had a large impact on growth as well. The company reported record numbers in November after signing a deal with Germany to supply medical cannabis. Germany has a population twice the size of California, which could offer serious growth potential for Aurora.
MPX Bioceuticals: Nevada’s Recreational Market
Marijuana Stocks functioning within Canada are making the most noise, but MPX Bioceuticals is capitalizing on Nevada’s booming recreational market. They are also targetting the medical marijuana markets in Arizona and Maryland. MPXEF trades on the Toronto Stock Exchange and has a cash-rich balance sheet.
When it comes to Nevada’s opportunities, MPX could seize a large market share in the coming months. While they don’t have the growth potential of some of the larger firms, they have the opportunity to be a niche provider seizing market share with Nevada.
Phivida Holdings: California Reach
California legalized recreational cannabis on January 1st, 2018. Now the market is ripe for the taking, and Phivida Holdings is vying for market share. Recently, the company announced a significant distribution agreement with Green Reef Distributing.
With this agreement, Phivida will be able to stock their products in 550 dispensaries across California. The company is focused on the development and distribution of on hemp-derived CBD products, a category of non-psychoactive cannabis use that has grown steadily over the years. the company’s products are non-GMO, vegan, sugar-free, and are lab-tested and GMP certified.
TGOD: The Next Big Canadian IPO
The Green Organic Dutchman and investors began the year as the most highly anticipated public offerings of 2018. TGOD has a proven management team, and they are looking far into the future of the legal cannabis market.
They own 175 acres where they plan to establish their facilities. Investments from private firms have also stuffed their balance sheet full of cash. The strategic partners leading the management team have driven market excitement and give this company a fighting chance.
**Full Disclosure: I own shares in Horizons Marijuana Life Sciences ETF (HMMJ) which has holdings in Canadian cannabis companies mentioned in this article.**