Wayne Gretzky famously said, that you “should not go to the puck, but rather to where the puck is going!” The same applies to the Marijuana Stock market. So far, the biggest gains have been made in the Canadian market over the past couple of years. Stocks such as Canopy Growth, Aphria, and Aurora have delivered up to 3000% gains for investors in the past 24 months alone! With the hype over Canada’s impending legalisation of Marijuana on October 17th this year, the simple thinking might be to invest into the Canadian market. That, however, is where the puck is. The big gains will be made where the puck is going.
These are the 5 marijuana stocks that could generate significant gains for your portfolio in 2018/19
Our thesis is that the big money will be made in the USA in the coming 12 to 24 months. Why? Well, for a number of reasons. First off, in this case, size does matter. The US market is arguably the biggest potential market in the world.
The marijuana floodgates are bursting wide open
In 2017 marijuana sales in the United States at the retail level to soared by roughly 30%, hitting $6.56 billion on the back of continued growth in existing recreational cannabis markets. At the same time, fledging medical marijuana programs in states such as Illinois, Nevada and New York posted impressive growth during the year.
Being 10x the size of Canada, means that the gains to be made in the near term are going to dwarf the kind of gains that have been made in Canadian Marijuana stocks in the past 24 months.
Secondly, the winds of change are blowing strongly through the political landscape. In April of this year, President Trump gave his support to Senator Gardner of Colorado in that Cannabis companies operating under legal environments in states that have passed respective legislation would be protected from Department of Justice prosecution.
In addition to this, Marijuana’s cousin – Hemp – is also going through a radical policy change with the Hemp Farming Act of 2018 being submitted to the Senate that would legalise hemp for industrial use. Game Changing.
So, looking to the US, these are the 5 stocks to look at in 2018-19
Terra Tech (TRTC)
Terra Tech (OTCQX:TRTC) operates through multiple subsidiary businesses including Blüm, IVXX, Edible Garden, and MediFarm. Blüm’s retail and medical cannabis facilities provide the highest quality medical cannabis to patients who are looking for alternative treatments for their chronic medical conditions as well as premium cannabis to the adult-use market in Nevada and California. A multi-state, vertically integrated business, the low market cap and high exposure to California make this a great potential US-based investment. We are adding to the portfolio at current prices
CannaRoyalty is a North American cannabis consumer product company currently focused on building a leading distribution business in California, the world’s largest regulated cannabis market. By building a world-class logistics platform and supporting contract manufacturing assets, the Company intends to support the growth of new and established cannabis brands. CannaRoyalty has developed a diversified portfolio of assets within the cannabis sector, including research, infrastructure and intellectual property to support their existing brands, partner products, and distribution networks. We are extremely bullish on CannaRoyalty and believe they offer huge upside as they continue to expand their US operations.
Kush Bottles (KSHB)
Kush Bottles is a dynamic sales platform that provides unique products and services for both businesses and consumers in the cannabis industry. Founded in 2010 as a packaging and supplies company for dispensaries and growers, Kush Bottles has sold more than 1 billion units and now regularly services more than 5,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe.
The Company has facilities in the three largest U.S. cannabis markets and a local sales presence in every major U.S. cannabis market. An ancillary play (in other words they do not touch the plant) they have the opportunity of supplying both the legal and black market with their packaging products. We believe Kush to hold tremendous value and to be the market leaders in the packaging market in the US.
MPX Bioceuticals (MPXEF)
MPX provides substantial management, staffing, procurement, advisory, financial, real estate rental, logistics, and administrative services to three medicinal cannabis enterprises in Arizona operating under the Health for Life (dispensaries) and the award-winning Melting Point Extracts (high-margin concentrates wholesale) brands.
GreenMart of Nevada is an award-winning licensed cultivation, production and wholesale business, licensed for both the medical and “adult use” sectors in Las Vegas, Nevada, and is already selling wholesale into the Nevada medical cannabis market. In Massachusetts, MPX is building out and will operate a cultivation and production facility as well as up to three dispensaries and manages three full-service dispensaries and one producer in Maryland. In Canada, MPX has acquired Canveda, which has received its cultivation license from Health Canada, will operate a cultivation and production facility in Peterborough, Ontario.
Their market leading extracts, coupled with a well-executed growth strategy make MPX one of our favourites. We continue to add to the portfolio at current stock prices.
CV Sciences (CVSI)
Our final play is in the booming Hemp industry. CV Sciences, Inc. operates as a life science company. It operates through two segments, Specialty Pharmaceuticals, and Consumer Products. The company focuses on developing and commercialising prescription drugs utilising synthetic cannabidiol (CBD) as the active pharmaceutical ingredient. Its initial drug candidate is CVSI-007 that combines CBD and nicotine for the treatment of smokeless tobacco use and addiction.
The company also engages in the development, manufacture, marketing, and sale of consumer products containing plant-based CBD under the PlusCBD Oil name in various market sectors, including nutraceutical, beauty care, specialty foods, and vape. A well-run business with great management, and a solid track record, they are best placed to take advantage of the massive Hemp market currently opening up across the US.
CV Sciences has been hyperbolic in the past couple of months. Gains of over 600% have been made. We first put this company on our reader’s radar in April 2018 and added to the portfolio in May.
The five stocks best placed to take advantage of the booming marijuana industry in 2018/2019
In summary, these five stocks cover the industry as a whole. We have the producers, the vertically-integrated, multi-state players and an, of course, the ancillary and pure-play hemp operators. This is where we are putting our money to reap massive gains as the industry continues to grow and evolve in 2018/19
And they told you money doesn’t grow on trees.