[Editor’s note: This story was originally published May 2018. It has since been republished and updated due to the developments from the Farm Bill. At least one stock has been removed from this list.]
When it comes to cannabis, we’ve come a long way since former President Bill Clinton denied ever inhaling. With the previous presidential administration’s frankness on the matter, marijuana has become more blasé. Naturally, marijuana stocks have also increased in popularity, where we have more choices today than was previously thought possible.
Of course, cannabis raises all kinds of images, and usually not positive ones. However, since legalized marijuana entered the mainstream consciousness, “green†companies offer a wide variety of services. For instance, some of the top marijuana stocks are levered toward medical cannabis. Recently, several companies have advantaged the vaporizer craze, offering a digital means to enjoy weed.
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The obvious risk to this industry, though, is the legal basis. Despite a record number of states adopting legalization measures, the federal government still considers marijuana a Schedule I drug. Technically, the feds could crack down on the industry, and by logical deduction, the growing list of marijuana companies. That said, investors will likely only have to worry about market risk.
First, putting a top on the industry will derail job growth. With President Donald Trump having few political allies, he desperately needs his economic cred. Doing anything to harm employment (no matter the source) is not part of that strategy. Second, American public sentiment dramatically favors legalization. As of October 2017, 64% of Americans believe weed should be legalized, as opposed to 34%. This is an exact public-opinion reversal from 14 years prior.
In other words, the future for the massive list of marijuana stocks is bright, and will only get brighter. Here are the top 29 sector picks:
Critics can’t deny it — the marijuana industry is booming. Currently, 30 states allow cannabis for medicinal purposes, while nine permit recreational use. Only four states are completely draconian. As a result, numerous entrepreneurs have raced into this sector hoping to strike it rich.
But where does one get advice on an unprecedented industry? That’s where AmeriCann Inc (OTCMKTS:ACAN) comes in. Primarily a real estate and facilities services company, AmeriCann offers logistical and administrative support for “weedpreneurs.†In addition, ACAN has a licensing procurement division that specializes in winning lucrative cannabis licenses for their clients.
Like many top marijuana stocks, ACAN experienced volatility under the Trump administration. However, with key members backing away from their initial “law and order†stance, AmeriCann has demonstrated nearer-term momentum. Since the beginning of April, ACAN jumped over 61%.
Look for AmeriCann to continue delivering the goods as the industry grows.
America isn’t the only country that has made cannabis great again. Our friendly neighbor to the north has also dived into the botanical sector, as Canadian firm Aurora Cannabis Inc (OTCMKTS:ACBFF) proves.
Focusing on the industry’s medicinal side, Aurora specializes in delivering medical-grade cannabis products at affordable prices. True to their corporate ethos, Aurora offers flat-rate “compassionate†pricing, along with free shipping within Canada. Just as importantly, the company has a vast network of pro-cannabis medical doctors that patients can contact.
Similar to the long list of marijuana stocks, ACBFF got off to a rocky start in 2018. Year-to-date, shares are down nearly 28%. That’s the bad news. The good news is that since early April, ACBFF has stabilized.
Could this be the calm before the breakout storm? Given the overall enthusiasm toward this sector, don’t count out ACBFF.
Starting a cannabis-related business can be a daunting task, particularly because few blueprints exist. American Cannabis Company Inc (OTCMKTS:AMMJ) makes this journey much more manageable. A consulting firm, American Cannabis is essentially an all-in-one shop for the budding entrepreneur.
Need help with license application and establishing your market? How about setting up a cultivation plant? American Cannabis levers multiple years of experience helping marijuana companies grow from the ground up. In addition to the setup phase, AMMJ offers branding and marketing services, as well as staffing solutions.
As an investment, AMMJ is on the more speculative side of the industry. That said, shares have relatively stabilized since early February. It’s definitely a risk, but one that’s potentially worth taking thanks to the increasingly positive sentiment.
It’s no surprise that cannabis investments, even those regarded as top marijuana stocks, are extremely speculative. Usually, these companies trade on the potential for future earnings. Otherwise, looking at their current financials would have most investors running for the hills.
But every now and then, a pure marijuana play that isn’t a fiscal train wreck comes along. That anomaly is Aphria Inc (OTCMKTS:APHQF). Specializing in greenhouse-grown medical cannabis, Aphria generates substantive revenue growth. Over the past three years, sales have ballooned over 3,200%. Not only that, its last two years produced positive net income.
Aphria’s speculative portion comes in its market performance. On a YTD basis, APHQF hemorrhaged nearly 44%. That said, I’m really digging the company’s financial performance, which is only becoming more promising.
In this case, I say ignore the volatility and pick up some APHQF on the cheap.
In a relatively young industry such as cannabis, conducting business as a holding company levers significant benefits. General Cannabis Corp (OTCMKTS:CANN) has multiple subsidiaries, each with a unique specialty. This structure enables General Cannabis to branch out, while still maintaining a stable balance sheet.
So far, the data is encouraging. Over the last four years, top-line sales shot up nearly 1,400%. In the most recent quarter, revenues increased by a 27% margin against the year-ago quarter. Just as importantly, General Cannabis doesn’t dip into debt too often to finance its operations.
Admittedly, though, the company’s market performance leaves a lot to be desired. On a YTD basis, CANN has lost 75%.
With so much taken off, now might be an ideal time to bet with the gambling portion of your portfolio!
A pharmaceutical company specializing in cannabidiolâ€based medicine, CV Sciences Inc (OTCMKTS:CVSI) is currently seeking regulatory approval for their alternative therapies. In a sector that pumps out exotic concoctions, CV Sciences embracing medicine’s natural component is a breath of fresh air.
More importantly, for investors, CVSI stock is raising a lot of eyebrows, and for the right reasons. Shares are up a respectable 14.4% YTD, making CVSI one of the top marijuana stocks. Much of that bullish sentiment came during the first half of April, and much upside likely remains.
From four years ago, CV Sciences has more than doubled revenues. Moreover, its most recent quarter was a massive success, with top-line sales skyrocketing more than 125%. Not coincidentally, net income was finally in the black for that quarter.
The list of marijuana stocks is paved with potential. CV Sciences, however, is already delivering the goods.
Stability isn’t a term often associated with the vast list of marijuana stocks. Multiply that sentiment five-fold with biotechnology firms. Cara Therapeutics Inc (NASDAQ:CARA) has found a way to be both, yet not act like it in the markets.
On a YTD basis, CARA shares are down just 2.3%. This might as well be considered a winner considering how ugly the sector has been this year. Not only that, this paring of losses is inclusive of a recent 7% drop-off.
However, I think CARA has something to offer for speculators with a longer-term view. The biotech firm has exciting drug pipelines, including research on cannabinoid receptors for pain suppression. In addition, management maintains a fairly clean balance sheet with zero debt.
Cannabis Science Inc (OTCMKTS:CBIS) is easily one of the riskiest plays within this list of marijuana stocks. With a share price fewer than six cents, CBIS stock isn’t what your financial advisor would recommend in your retirement portfolio.
But with that caveat out of the way, CBIS does have huge upside potential. Thanks to the combination of a small share price and an emerging industry, CBIS can shoot up at random. Of course, the opposite is also true, so you’ll want to honestly assess your risk tolerance.
However, I believe Cannabis Science is more likely to pleasantly surprise. First, it’s one of the oldest cannabis companies still in business. Second, management is hard at work on developing cannabis-based therapies for wide-ranging diseases.
Finally, with CBIS stabilizing in the markets recently, speculators have an opportunity to strike.
Although most companies produce cannabis products for human consumption, your household pets might appreciate some botanical love as well. At least that’s what Peak Pharmaceuticals Inc (OTCMKTS:PKPH) would have you believe, and they’re probably onto something.
Peak Pharmaceuticals has an exclusive license agreement with Canna-Pet, LLC, giving Peak access to animal cannabis products. A State of the American Pet survey revealed that 41% of pet owners are open to alternative therapies for their four-legged friends. Should cannabis for humans take off, it’s only natural that the pet sector would experience similar bullishness.
As with other marijuana stocks, PKPH is incredibly speculative. With a 10-cent share price, Peak Pharmaceuticals doesn’t exactly inspire confidence. However, PKPH has been steadily rising since August, so a massive rally isn’t out of the question.
I typically don’t like to talk about companies with shares prices literally in the pennies. These are often riddled with fundamental vulnerabilities, and will more likely lose money than gain.