The marijuana industry is in its early stages.
Pot stocks will continue to zig and zag, but they’re headed only one way over the long run... up!
Remarks from the Trump administration will continue to shake share prices in the short run. But marijuana industry growth is an unstoppable trend.
Public support for legal marijuana in the U.S. has reached 60%. That’s the highest level of support in more than 50 years.
The people are speaking up and states are legalizing marijuana. The federal government will eventually have to follow suit as more states legalize marijuana. This trend is creating huge opportunities.
Pure “pot plays” have popped up, but they’re small. Only a few of these penny stock companies will survive, and they have low liquidity. That’s why you should consider more established businesses entering the field.
The six companies listed below are mostly more established players. They give you access to the growing marijuana industry without as much risk.
Now before we show you the six stocks, let’s look at why the marijuana industry is a great place to invest...
America’s marijuana market jumped to about $7 billion in 2016. That represents 26% growth over 2015’s market.
That kind of progression is extraordinary...
But hold onto your hash pipes, because it isn’t done yet. By 2026 leading investment bank Cowen & Co. expects the marijuana industry to grow to $50 billion!
But how do we get there? Well, it started out with one state at a time. But now it’s picking up steam. Multiple states legalized medical marijuana in November of last year.
Why? Legalizing marijuana is gaining public interest... though that alone won’t bring it to your neighborhood. A huge issue that’s pushing it forward is taxes.
Colorado took in $70 million in “green” taxes during its 2014 - 2015 fiscal year. And it climbed to roughly $135 million in 2016.
Those figures should help you understand why the number of states legalizing cannabis could increase even more this year.
In California last year, medical marijuana was legal, while recreational marijuana was not. But Californians put recreational pot use on the November ballot... and it passed. Cowen said that alone could triple the nation’s legal marijuana industry.
That’s a huge opportunity.
As the researchers at Cowen like to point out... there are now more marijuana dispensaries in Colorado than there are Starbucks coffee shops.
“We estimate there could be as many as 17,000 legal cannabis retailers in the U.S. upon full legalization,” Cowen said.
This growing industry is in its early stages, and its potential is huge.
It’s one of the best times to invest. But with many pot stocks out there today, you need to tread lightly. There will be huge winners... and losers, too. That’s why it’s best to diversify.
Limit Your Risk
Putting all your money into just one pot stock is risky. If it goes belly-up, you’d lose all your money. So limit your risk by investing in multiple companies.
Our money system has picked six great stocks. But many of them are small. Their prices can jump all over the place.
There’s huge potential with the companies below... But don’t bet the farm on just one.
Ticker: ABBV (NYSE)
This is the largest of our top six picks. AbbVie is a diversified biotech company that sells hundreds of products around the world. And one of its drugs, Marinol, is made out of a synthetic form of tetrahydrocannabinol, or THC, a primary component of cannabis.
Marinol is FDA-approved and treats nausea in chemotherapy patients. It’s also used for patients with a loss of appetite.
While this THC drug is a success, it’s only a small blip in AbbVie’s total revenue right now... But it’s opening the door for future marijuana-related drugs. AbbVie is an established player in the field and one of the safest ways to gain exposure to pot-related profits.
Ticker: SMG (NYSE)
Scotts Miracle-Gro is a powerful way to indirectly play the marijuana boom. The business provides lawn and garden products worldwide. And its products are already being used to grow marijuana.
One area that Scotts is expanding into is lighting and hydroponics. The business bought a Dutch “grow lighting” company for $136 million. And it’s inked deals with indoor growing businesses in California, Colorado and Arizona.
Scotts will generate more revenue as the marijuana industry expands. And in the meantime, shareholders collect a healthy 2.2% dividend yield.
Ticker: GWPH (Nasdaq)
GW Pharmaceuticals develops cannabis prescription medicines. The company operates through three segments: Commercial, Sativex Research and Development, and Pipeline Research and Development.
One of GW’s major drugs is Epidiolex. It’s an oral medicine that treats refractory childhood epilepsies. Another treatment GW provides is cancer pain relief.
GW is constantly researching and developing new cannabis-related drugs. As pot is decriminalized across the board, GW will have an easier time approving its drugs. This will push new revenue to shareholders.
Ticker: CARA (Nasdaq)
Cara Therapeutics is a biotech company focused on pain relief. The business is bent on pinpointing certain effects that cannabis has on our brains. This allows it to develop pain-relief drugs.
Cara is a small company. It’s valued at less than $500 million, and it’s a ways out from turning a profit. Still, the profit potential is huge. The business could take off if the drugs in its pipeline are successful.
Ticker: ZYNE (Nasdaq)
Still in its early stages, Zynerba Pharmaceuticals is an even smaller company than Cara Therapeutics. It’s about half the size but has a great deal of potential.
The business focuses on developing synthetic cannabis-related drugs that are delivered through your skin. Zynerba will unlock enormous profits for shareholders as its drugs gain FDA approval.
Terra Tech Corp
Ticker: TRTC (OTC)
Terra Tech is the smallest of the six pot stock recommendations. It has great potential but will likely be a bumpy ride for investors due to its size.
Terra Tech is a cannabis agriculture company that operates through two segments: hydroponic produce and cannabis products. Through these segments, Terra Tech builds and sells growing equipment and grows products. It’s an integrated business model that will grow with legalized marijuana.
These six stocks will thrive as pot is legalized. They’re listed in order by size, from largest to smallest. So to limit price swings, consider putting more into the larger companies. And don’t put all your money into one stock.
The marijuana industry is in its early stages. And the fickle Trump administration will make its growth bumpy in the short term. But these companies will make billions of dollars. And early investors will have the best chance for success and outsized profits.
The Oxford Club
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