Top 5 Marijuana Stocks with the Most Potential

Top 5 Marijuana Stocks with the Most Potential

Marijuana stocks have received tremendous hype from investors all over the world. And the marijuana industry is projected to be one of the market’s quickest growing sectors.

Canada’s legalized recreational weed market is snowballing sales, and the party has just started. It’s only a matter of time before other countries fully legalize marijuana. The U.S. passed the Farm Bill in 2018, allowing legal hemp sales. Since the legalization, the hemp and CBD industry has ignited with explosive growth.

Investors are eager to get in on the money-making industry but they must be willing to take on some risk. The sector is still very new, and many marijuana companies are popping up all over the place. Not every one of them will succeed long term. There is no crystal ball to tell investors the future of the cannabis sector.

The best companies to invest in are industry leaders with strong partnerships. Below is an outline of 5 marijuana stocks with the most potential.

Tilray (TLRY)

Tilray is one of the first licensed companies to produce medical marijuana in Canada and has operations throughout the globe. The company is a major player in the medical and recreational cannabis market. Tilray participates in the cultivation, distribution, processing, and research of cannabis. The stock went public during the height of the cannabis bubble and is the first marijuana company to be listed on the Nasdaq. 

Why it has potential

Tilray stock went on a rocket ship ride last year with shares reaching price levels of $300. Euphoria drove the stock price to atmospheric levels. Unfortunately, the massive gains didn’t hold and the stock basically crashed. Investors that didn’t buy at the top now have a chance to get into Tilray near its IPO price.

The marijuana stock has a lot of exciting developments to look forward to. The company struck a beverage research deal with the king of beers Anheuser-Busch InBev (BUD). THC and CBD infused beverages are expected to be a huge market with plenty of revenue. The partnership with mega-corporation Anheuser-Busch greatly strengthens Tilrays long term outlook. 

Another notable partnership is the global supply and distribution arrangement with pharmaceutical goliath Novartis AG (NVS). This is huge for Tilrays worldwide medical marijuana presence. Tilray CEO stated, “the deal will allow the company to expand into more markets, more quickly.” 

Canopy Growth Corp. (CGC)

Canopy Growth is the world’s largest medical marijuana company by market value. The Canadian based corporation is involved in the production, distribution, and sale of cannabis. Its main products include flower, oils, capsules, and hemp. With over 5 million square feet of growing space, Canopy Growth is focused on dominating the global cannabis industry. 

Why it has potential

Alcohol giant Constellation Brands (STZ) invested $4 billion in Canopy Growth and controls more than 35 percent of the company. This makes Canopy well-positioned for the cannabis-infused beverage market.

Canopy’s purchase of U.S. pot firm Acreage Holdings Inc. makes the company poised to capture the U.S. market once marijuana is fully legal. The company also has unique ties and partnerships with many celebrities including Seth Rogen, Martha Stewart, and Snoop Dogg. 

Cronos Group (CRON)

Cronos is another Canadian based company that engages in the production, processing, and distribution of marijuana. The business currently has operations in five continents. The business focuses on research, cannabis technology, and product development. Its brand portfolio includes Whistler Medical, Peace Naturals, Original BC, and more. 

Why it has potential

Cronos Group caught the attention of investors when tobacco giant Altria Group (MO) purchased a 45 percent stake in the company for $1.8 Billion. The deal also includes a warrant that would allow Altria to increase its stake in Cronos to around 55 Percent.

With Altria as a part-owner, Cronos is capable of capturing the cigarette and vaping industry. The partnership should also boost the company’s research and development of cannabis products.  

GW Pharmaceuticals (GWPH)

GW Pharmaceuticals is a cannabis biotech company based in the United Kingdom. It primarily operates in the United States, Europe, Asia, and Canada. GW is becoming an established world leader in the development of marijuana-based medications and cannabis therapeutics. Its seizure medication Epidiolex is the first cannabis-derived medicine to be approved by the FDA.

Why it has potential

GW Pharmaceuticals exhibits promising growth in the medical marijuana sector. The CBD drug Epidiolex has increased sales each quarter this year. GW’s Q2 revenue is over 2,000% higher than the previous year. The company has a deep and promising pipeline. Their next blockbuster drug is “Sativex” and it’s already approved in over 25 countries outside of the United States. 

Marijuana is an inexpensive product that has many medicinal uses. GW has the potential to disrupt the pharmaceutical industry in a major way. With the first-ever FDA approved cannabis-derived drug, GW has taken the lead in the cannabis/biotech sector. 

HEXO Corp. (HEXO)

The premium cannabis company was founded in 2013 and is based in Gatineau, Canada. HEXO is a manufacturer, producer, and distributor of medicinal marijuana. Some of its products include Elixir No. 1 Brands, Time of Day, and H2. Since the legalization of recreational marijuana in Canada, the company serves both medical and recreational markets. 

Why it has potential

HEXO has award-winning cannabis products and a passionate team. The company’s master grower Agnes Kwasniewska won the award for “Master Grower of the Year.” The cultivation team at HEXO has a reputation for producing high-quality cannabis products. 

HEXO formed a strategic partnership with the large beer company Molson Coors Brewing (TAP). The two companies have jointly created a handful of marijuana products including edibles, beverages, and vapes. This partnership will be a major catalyst that should greatly increase HEXO’s future revenue. 

Bottom line

Currently, there is an overabundance of cannabis companies, and almost all of them are not profitable. Investors are optimistic profits will start to skyrocket once countries around the world legalize pot. 

For now, investing in weed stocks is going to be a gamble. Investors will need to look past the hype and do their due diligence

Cannabis stocks that are most likely to prosper are ones that can form strong alliances and quickly establish a large economic moat.