The Best Weed Stocks With Lots of Growth Potential
You can call it cannabis, marijuana, pot or weed. But no matter its name, there is a lot of growth potential in the industry. And savvy investors can put themselves in a strong position to profit from the best weed stocks.
Cannabis had some major breakthroughs last year. There were five states with legalization measures on the ballot. And marijuana won in landslide fashion. Marijuana legalization appears to be one of the few things red and blue states agree on.
And yet, the U.S. remains the only country in North America where cannabis hasn’t been legalized on the federal level. But again, 16 U.S. states have legalized recreational adult-use. And 36 states have legalized medical marijuana.
Meanwhile, the bipartisan Secure and Fair Enforcement (Safe) Banking Act has been reintroduced in the House. If passed, the law would allow plant-touching businesses from growers to dispensaries access to proper banking. On top of that, if banks are given access to pot companies, it could be a tipping point. There’s a chance – if passed – it could lead to U.S.-based marijuana companies being listed on major exchanges…
For the time being, both the New York Stock Exchange (NYSE) and Nasdaq don’t allow U.S.-based marijuana companies to be listed on their exchanges. This is due to pot still being illegal on a federal level.
So instead, Canadian companies are getting the lion’s share of exposure from being on these exchanges. But that doesn’t mean Canada is the only country producing the best weeds stocks. As Profit Trends‘ Matthew Carr pointed out recently, when ranking cannabis companies by quarterly revenue, there’s only one Canadian outfit in the top five.
Despite marijuana still being on the list of Schedule I controlled substances, U.S. pot companies are raking in the dough… Yet, there’s still a lot of room for expansion.
Five of the Best Weed Stocks to Buy Now
- Canopy Growth Corp. (Nasdaq: CGC)
- Curaleaf Holdings (OTC: CURLF)
- Tilray (Nasdaq: TLRY)
- Trulieve (OTC: TCNNF)
- Subversive Acquisition LP (OTC: SBVRF)
The marijuana industry has had some major ups and downs as far as stocks go. That’s likely to remain the case until legalization happens in the U.S. So, if volatility makes you nervous, these might not be the investments for you. However, those that can tolerate ups and downs could be in a great position to profit in the future.
Canopy Growth Corp.
Starting alphabetically, Canopy has the best quarterly revenue of the Canadian companies on this list. It has the highest market share in its home country. But the company has a partnership up its sleeve that could send its stock rocketing higher. When Mexico legalized marijuana, it opened up a huge possibility for Canopy.
Not long ago, analysts thought that Constellation Brands’ (NYSE: STZ) major investment in Canopy could be a disaster. However, Constellation – which owns the Corona beer brand – has some fortuitous commercial infrastructure in Mexico. Even though Canopy has been forced to miss out on U.S. marijuana markets, it’s poised to profit on what will be the world’s largest cannabis market. And that alone is enough to make this one of the best weed stocks out there right now.
Speaking of expansion, Curaleaf Holdings – which currently boasts the highest revenue of any cannabis company – has also found a home in expanding markets. Curaleaf is on track to be the first marijuana company to report more than $1 billion in annual revenue. And this is while largely operating in a country where the plant is illegal on the federal level. It has also acquired Emmac, which is the largest cannabis producer in Europe. This gives the company a strong position in two markets that could prove vital in the future.
Germany, Italy, Spain and the United Kingdom all have booming medical marijuana sales. And Emmac plans to greatly expand its production power of marijuana in the coming year. Because Curaleaf has such powerful positions in two huge markets, its status as one of the best weed stocks is hard to ignore. And when legalization comes to any of the countries mentioned above, Curaleaf will have a noticeable advantage over most of the competition.
When Aphria and Tilray announced their merger, it resulted in the world’s largest cannabis company. While big doesn’t always mean better, in this case the combined powers are hard overlook. The merger brought a significant increase in global operations. Tilray already had a foothold in the European medical marijuana industry. Meanwhile Aphria has strongholds in Alberta and Ontario.
On top of this, Aphria’s significant production lends itself nicely to Tilray’s shortfalls. Thanks to this merger, Tilray will no longer need to outsource production to outside growers. This will undoubtedly result in higher revenues in the future for this merged entity. And that makes this one of the best weed stocks you can get your hands on.
It may not be the first billion-dollar pot company, but Trulieve is certainly in a position to get there eventually. The company has a commanding presence in its home state of Florida. But this multi-state operator (MSO) has also broken into other states as well. It now has 83 stores nationwide. And as a vertically integrated “seed-to-sale” operation, Trulieve has honed its business in Florida and figured out exactly how to scale up.
The only thing holding Trulieve back for the time being is a lack of available licenses. But as their numbers grow, so will this company’s profits. Considering the company has already fared well in a state where recreational marijuana is technically illegal, it’s sure to flourish if and when laws change. In other words, this is one of the best weed stocks on the over-the-counter markets right now.
Real estate investment trusts (REITs) have proven to be smart investments of late. What these do is allow folks to invest in real estate without having to manage or own the property. Managers of REITs buy a bunch of different properties and manage them for investors. It’s a hands off approach for investors and it can lead to consistent income…
The average dividend yield from S&P 500 companies is about 1.5%. That pales in comparison to the dividends doled out by REITs. That’s because they have to pay out a minimum of 90% of their taxable income. And they do so in the form of dividends.
A couple of years ago, we would have been pointing folks towards Innovative Industrial Properties (NYSE: IIPR). But this REIT has grown to the point where future growth is uncertain. However, Subversive Acquisition is just getting started. It was the first case of a SPAC converting into a publicly traded REIT. The company is targeting a 6.5% yield with monthly dividend payouts. This may be one of the more unusual investments on our list of best weed stocks, but promising growth potential paired with monthly payments to investors is hard to pass up.
The Bottom Line on the Best Weed Stocks
Last year, global sales of marijuana sales rose by a whopping 48%. But still, even the best weed stocks don’t reflect this massive increase. Shares are still trading at a fraction of what they could be worth. This represents a huge opportunity for investors that can deal with some short-term volatility.
The Eurpoean marijuana market is expected to be worth $37 billion by 2027. As Matthew Carr reported recently, the U.S. market could be worth $100 billion by the next decade. And in the meantime, Mexico remains the largest marijuana market to date.
If you’d like to stay on top of investment opportunities in the cannabis market, we suggest signing up for Matthew Carr’s free Profit Trends e-letter. The cannabis industry can turn on a dime. And investment opportunities can change rapidly. But Matthew Carr keeps his finger on the pulse of the industry and always lets his readers know the latest news, updates and opportunities.
About Matthew Makowski
Matthew Makowski is a senior research analyst and writer at Investment U. He has been studying and writing about the markets for 20 years. Equally comfortable identifying value stocks as he is discounts in the crypto markets, Matthew began mining Bitcoin in 2011 and has since honed his focus on the cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dog, Dorito.