As the mainstreaming of marijuana gathers momentum, a growing number of countries are expected to make consuming cannabis legal over the next few years.
Significant investments, improved distribution and refined marketing strategies mean theses public cannabis companies are only just starting to sprout. Cannabis stock investors are looking for the industry to deliver improvement this year.
With edibles now available across Canada, investors will be looking to see if Cannabis 2.0 can add much-needed topline growth to the Canadian cultivators. In the U.S., recreational legalization is expected to be a ballet issue in New York and Florida this year, which could reignite interest in cannabis stocks.
The recent start of recreational cannabis in Illinois and Michigan are prime examples of how U.S. multi-state operators (MSOs) can immediately benefit from having existing cannabis operations in a particular state. The state had an estimated $200 million in medical marijuana sales with research predicting sales surging to between $2 billion and $4 billion with adult-use cannabis legalized starting January 1.
The U.S. currently has 11 states with recreational cannabis approved with over 30 states approving various forms of medical cannabis. The easy path to legislative approval lies within these states with existing medical cannabis programs. A primary target being large states such as Arizona, Florida and New York.
High-flying and volatile cannabis stocks have caught the attention of both the Main street and Wall Street this year.For investors ready to jump on the hemp CBD bandwagon, there are a few potential stocks to consider buying at these levels.
- Enviro-Serv Inc. (OTC: EVSV)
Enviro-Serv Inc. (OTC: EVSV) is a Delaware corporation. The Company is a holding company for subsidiaries generating revenue in full service pest control, environmental government contracting and the cultivation and processing of bio mass hemp and hemp related products.
Last year, the company has successfully grown, harvested, dried and shucked, and securely stored its entire hemp crop located in Beaver Dam, Wisconsin as updated on social media throughout the growing season. Additionally, the company is pleased to announce it has achieved the distinct honor of receiving the necessary “FIT FOR COMMERCE” certificates from the Wisconsin Dept. of Agriculture which allows the legal handling, transporting and selling of the hemp biomass which had to pass rigorous and meticulous state field testing for legal THC levels which were completed in October.
Chris Trina, Chairman and CEO, stated this to the investment public: “In May of this year we had a defined business plan that was meticulously executed over the last 7 months which has brought 13,000 seedlings consisting of 4 top feminine hemp strains full circle to an estimated 7,000 lbs. of high quality processed & shucked flower available for sale for the first time this year on a mass scale. We have been in close contact with 3 high quality processing partners, 2 located in Wisconsin and the other in Michigan, to assist us with whichever direction we decide to move forward with on the processing front.”
Trina went on to emphasize, “The heavy lifting is now over it was a hugely daunting and exhaustive task to harvest and dry this much hemp by hand and I am extremely proud of all the men and women who made this project a success. We can now begin the many opportunities in monetizing our crop but ever so carefully as we closely monitor supply/demand and overall pricing fluctuations which are changing literally daily. We have successfully and very recently sold limited amounts of trimmed flower for prices between $170-$220 lb. to local CBD stores and wholesalers which is highly encouraging. We have quotes on hemp benchmarks exchange showing full spectrum distillate assessed prices at $2,831 per kilo as of October 2019 with prices decreasing during this harvest time frame. October Hemp benchmarks exchange also is quoting smokable flower assessed prices at around $319 per lb. but also decreasing during the harvest time frame. To put all of these pricing quotes into conservative perspective with prices at their weakest points of the season currently our stored hemp carries a value today of an estimated $450,000-$1,000,000 according to current and forecast hemp benchmarks.”
2. Tilray (NASDAQ: TLRY)
Tilray (NASDAQ: TLRY) has established an international presence in 13 different countries. The company also licenses U.S. cannabis brands like Marley Natural, Irisa and Goodship in Canada via its partnership with Privateer. In addition, Tilray has a major agreement with alcohol beverage maker Anheuser Busch Inbev (BUD). The research and development deal is currently restricted to Canada, but management expects the deal will eventually be expanded globally. Tilray recently announced a deal with InterCure Ltd. subsidiary Canndoc Ltd., in which 2.5 tonnes of medical cannabis will be shipped to Israel by Tilray’s Portugal-based subsidiary, Tilray Portugal Unipessoal Lda. The cannabis, which is slated to arrive in early-January, will be the first medical cannabis import that is allowed to enter Israel. In addition to the agreement, Tilray said it has agreed to buy up to 5 tonnes of whole flower from Canndoc beginning in mid-2020.
3. Aphria (NYSE: APHA)
Aphria (NYSE: APHA) is unique among cannabis stocks because of the company’s commitment to generating positive earnings and creating value for investors. Unfortunately, the stock has taken a hit in recent months following fraud accusations by short sellers. An independent review into the situation concluded Aphria did not overpay for the acquisition of its Latin American business, but several Aphria directors had conflicts of interest associated with the deal. Aphria’s current annual production capacity is 115,000 kg.
4. Canopy Growth Corp. (NYSE: CGC)
Canopy Growth Corp. (NYSE: CGC) operates in 15 countries and owns popular marijuana brands like Tweed, LBS and DNA Certified. In addition to its core cannabis business, Canopy is preparing to launch a number of new beverage, vapor and edible products. The company says beverages could eventually grow to represent a fourth of its overall cannabis market.
A few industries offer the long-term growth potential of legal cannabis which could ultimately mean that patient investors in the green rush are handsomely rewarded. If the snowball starts rolling toward a bullish event, the bounce buying volume coupled with the long buying volume from bulls and momentum traders could create an extremely volatile near-term spike in these four cannabis companies.