Way before the ban on cannabis, hemp was a commercial plant used to produce textiles and many other products. While the industrial benefits of hemp are well understood, legalization has remained a hindrance to the industry’s growth.
Canada is one of the countries that has legalized the commercial use of cannabis products. As more countries come on board, the industry is likely to see significant growth.
Some companies already have award-winning CBDfx gummies and other edibles, CBD oil, tinctures, and more. These products are gaining worldwide recognition and provide excellent investment opportunities.
The legalization of the recreational use of marijuana brought high expectations. Analysts project that the cannabis industry will grow at a compound annual growth rate (CAGR) of 14% up to 2025. As the legalization spreads, medical sales are expected to grow at a rate of 17% for the next five years.
For those who have seen the potential of the cannabis industry, investing in related businesses would be a good decision. Are you looking for a company with high momentum growth for short-term returns or slow, sustained growth?
Here are some of the stocks that could turn out to be big winners you should consider:
1. Arena Pharmaceuticals (NASDAQ: ARNA)
Arena Pharmaceuticals has a market cap of US$3.65 B . It is not the biggest in the market. But its niche makes it an exciting investment option. The company has a diversified portfolio with a niche for cannabinoid therapeutics.
The company’s focus is on research and development of cannabinoid drugs. Its core product, Olorinab (APD371), is still undergoing research.
2. Corbus Pharmaceuticals Holdings Inc. (NASDAQ: CRBP)
Corbus Pharmaceuticals deals with medicinal cannabis. The company is currently testing a drug for inflammatory and fibrotic diseases.
If successful, the drug could prove to be the panacea for several inflammatory diseases, including Alzheimer’s and Parkinson’s disease. The company is also working on several other drugs that target the endocannabinoid system.
It could be a good idea to invest in Corbus if you believe in the potential of their research. If these drugs become successful, their stock could skyrocket because of the high demand alone.
3. MediPharm (OTC Pink: MEDIF)
MediPharm is a 2020 high-potential stock. While the company is worth just $380 million, the first-quarter report for 2020 indicates a gross profit of $10.9 million. Compared to the same period in 2019, the difference is about $4 million of growth.
The company specializes in the extraction of marijuana products. CBD oil is the most in demand marijuana by-product. By taking a central role in the supply chain of CBD, MediPharm has a high potential to continue rising.
In the extraction business, most companies sign contracts that can last at least three years, making it easy to predict profits. Currently, MediPharm has contracts for the supply of cannabinoids, resins, distillates, and concentrates.
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4. The Valens Company (OTC Pink: VLNCF)
If you are looking for cheap stocks with huge potential, this is the company you should be evaluating.
Among marijuana stocks, Valens is one of the cheapest . The company has high potential as it has signed key processing contracts. This ensures that the company can spend less and increase its profit margins.
5. Sundial Growers (NASDAQ: SNDL)
Sundial Growers hit the stock markets with its IPO in 2019. The company specializes in wholesale marijuana supply.
Although it faced some difficulties due to supply issues, the supply chain seems to have stabilized. While the wholesale business does not offer much potential, the company plans to move into other marijuana products like marijuana seeds.
Sundial operates as a pharmaceutical company which is set to be a leader in the production of medicinal cannabis. The company expects to benefit from the increasing demand for medicinal cannabis.
6. Aphria (NASDAQ: APHA)
Aphria is a top-tier grower with an estimated potential of 255,000 kilos per year. This could make it one of the largest marijuana suppliers for best marijuana seeds in Canada.
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What makes Aphria’s stock a good option is that Health Canada has certified all its farms, and the company has its own distribution subsidiary that deals with the supply of its products.
7. Tilray (NASDAQ: TLRY)
Tilray is one of the most successful companies in the medical cannabis business. Recently, the company extended its operation to tap into recreational marijuana.
With Canada’s weed market still mostly untapped, it is a good place for future growth. Also, Tilray has a considerable market share in Europe and the United States.
8. Canopy Growth Corp. (NYSE: CGC)
With a market capitalization of $7.84 billion, Canopy Growth is the largest company in this industry. The company focuses on cannabis production with a peak potential of 500,000 kg per year.
By early 2020, the company had expanded its 800,000 square feet production farm to 4.3 million feet. If you want to buy stocks that are ready to explode, it is worth considering Canopy Growth.
9. cbdMD Inc. (AMEX: YCBD)
cbdMD specializes in CBD products. The company deals in oil, gummies, topicals, tinctures, and pet products. Recently, the company partnered with several athletes to test its CBD oil for pain.
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The drug has a potential for treating visceral pain, especially with an inclination towards gastrointestinal illnesses. Given the tolerability of CBD and its minimal side effects. The drug could prove a game-changer in the analgesic industry.
10. Aurora Cannabis Inc. (NYSE: ACB)
Aurora is a seasoned player that has been in the industry much longer than its competitors. The company has eight production facilities in Canada and Denmark.
Aurora has laid its roots in the international cannabis market by acquiring operational licenses in 18 countries.
In 2019, the company acquired MedReleaf in a deal worth $2.5-billion. While it has faced a turbulent time as all other cannabis stocks, its Aurora’s value has risen in the first half of 2020.
The cannabis industry is on the verge of explosive growth. Since CBD is the main product garnering attention, investing in CBD stocks is the perfect way to tap into this lucrative industry. These are some of the top stocks that you should consider investing in to capitalize on this rapidly growing market.
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