The Weed Stock Revolution
We’re talkin’ ‘bout a revolution…
Attitudes are changing and eyes are opening to the awesome potential of the cannabis industry, with the global legal marijuana market now forecast to reach a staggering $146 billion by 2025.
A key driver behind this growth is the increasing number of countries softening their stance on both medicinal and recreational cannabis. None more so than the US, which appears to have come full circle in its complex relationship with marijuana.
A (Very) Brief History of Legal Cannabis in the US
Marijuana prohibition was enacted in 1937, and its use for any reason (medical or otherwise) was outlawed entirely in 1970. From that moment on, a line was drawn and a legalization movement gathered pace.
California blazed a trail by legalizing medical marijuana in 1996, but it was in 2012 when everything changed. Both Colorado and Washington introduced legislation, making recreational cannabis legal in the respective states. California and six other states soon followed suit, and today the marijuana industry in the U.S. is worth over $9 billion – and shows no sign of slowing down.
The 2018 Farm Bill
Another shot in the arm for the cannabis industry, the 2018 Farm Bill effectively legalized the growth and cultivation of hemp. This will allow farmers and cannabis companies to produce their own hemp crops within the US, and extract the non-psychoactive cannabidiol (CBD) to create medicines, supplements, and commercial products, such as beverages and edibles.
So, with all this in mind, how do you take advantage of the weed stock revolution?
Three Companies to Watch in 2019
- Canopy Growth (CGC) – The biggest grower in Canada, Canopy Growth has made some shrewd acquisitions to ensure its dominance in the short-term. It’s also the first (and so far, only) marijuana stock to be listed on the NYSE. The passing of the Farm Bill should see more capital investment in the US as the company seeks to establish itself as a global player in 2019.
- Cronos Group Inc. (CRON) – Another Canadian company, Cronos Group is making waves. In December 2018, tobacco giant Altria took a 38% stake in the company for a cool $1.8 billion. This could pave the way to an entry into the lucrative US marijuana market.
- Cannabis Sativa Inc. (CBDS) – Holding a patent for a CBD hypertension lozenge, Cannabis Sativa Inc. has an opportunity to firmly establish itself as a major operator in the medicinal cannabis industry. The market for hypertension drugs is forecast to reach $23.1 billion by 2023, and a natural alternative to pharmaceutical treatment could be a gamechanger for both the 7 out of 10 Americans afflicted, and the company’s investors.
Or, Sell Pickaxes and Shovels
As we mentioned in a recent blog post about the California Gold Rush, sometimes it pays to take a step back during a boom and look for other opportunities. Just as many made their fortune selling boots, pickaxes, and shovels, smart investors can look to ride the coattails of the cannabis revolution.
One such company profiting from the fast-growing marijuana sector is Scotts Miracle Gro (SMG). An American multinational, it leads the way in selling lawn and garden equipment, and will be the go-to suppliers of fertilizers and hydroponic supplies for growers.
One to keep an eye on if you have reservations investing in marijuana directly.
Try Before You Buy
With a market value that exceeds corn and wheat – and one that could soon dwarf coffee – the marijuana market is something of a juggernaut. But as with any investment, there’s always a risk.
So, if you’d like to first dip your toe in and see what all the fuss is about, you can! Our investment game, Fantasy Finance™, gives you the chance to invest virtual money in a risk-free environment. Hone your skills by taking an in-game stake in any of the cannabis companies mentioned in this post before you invest for real.