Marijuana Boom 2018: Two of the Most Popular Stocks
The marijuana story is still growing like a weed.
As controversial as it may be, it’s also one of the most explosive opportunities we’ve seen. In fact, with recent legalization, marijuana could very well be a $30 billion market in four years. It’s only a $6.7 billion industry right now, up 30% from 2015.
Right now, 29 states and the District of Columbia have legalized marijuana for medical purposes. As for its recreational approval, California just became the eighth state to make it legal.
Again, controversial or not, you can’t ignore the numbers.
- California could see $5 billion in revenue from its legalization.
- In Colorado, marijuana sales were up to 4998.19 million in 2015. In the first six months of 2017, revenue was up to $1 billion in sales.
- In Nevada the projection is a whopping $6 billion, while Massachusetts is estimated to see around $1.5 billion in gross sales the first year.
- Maine is projected to enjoy $290 million in gross sales annually.
- In Florida, legalization could generate up to $2 billion in annual sales.
- North Dakota could see $75 million just starting out.
- New Mexico already allows for its medical use but could expand laws, as well, especially to help reduce the state’s massive budget deficit. Within the first year of such sales, estimates say the state could see $60 to $70 million added to the state budget.
- In Michigan, the state is working to secure enough signatures to get legalization on the ballot by November 2018. Even New Jersey has pledged to sign legislation that would allow for the possession and sale of recreational marijuana.
Granted, Attorney General Jeff Sessions fought back against its legalization, but it’s not stopping the run in these stocks. Better yet, Democrats and Republicans won’t let him make any changes without a fight.
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However, it’s not just the U.S. that’s a catalyst. It’s Canada, too.
Though, when it comes to legalization in Canada, investors may have to wait a bit longer. In early 2018, Canada announced it might not be approved until August 2018.
In fact, according to CTV News:
“According to Health Minister Ginette Petitpas Taylor, provinces and territories would then need between eight to 12 weeks following royal assent (which would come immediately after the bill’s passage in the Upper House) to be ready for retail sales. Barring amendments or the bill’s failure in the Red Chamber, that would mean recreational marijuana would be available for purchase in the first week of August, at the very earliest.”
On passage news, analysts say Canada could have nearly four million recreational marijuana users, creating a monstrous $4.5 billion industry by 2021 The industry could balloon to $8.7 billion shortly after, as marijuana retail sales just in Canada are likely to surpass beer, wine and spirit sales combined. That’s big money.
There’s even a supply-demand issue.
Medical marijuana patients are worried that supply could dwindle when recreational marijuana becomes legal. "I look at what happened in Nevada last summer, Colorado, Washington, Oregon when they opened retail," said Peter Bernard, president of the Massachusetts Grower Advocacy Council, as quoted by MassLive.com.. "All of them ran out in a week or less."
These are sure signs of a boom in the marijuana patch we can’t ignore.
Two stocks that many investors have been watching, include:
OrganiGram Holdings (OGRMF)
OGRMF produces and sells medical marijuana in Canada. As Canada moves to legalize marijuana use on the federal level, the company is ramping up production to capitalize on new market opportunities as an existing licensed producer. An active expansion includes a 15,000 sq. ft. extract processing facility that could prove quite useful, as the market begins to explode. Net sales have already increased substantially year over year to $6.12 million from $986,676. Margins have improved to 54% from 25%. Net profits jumped from negative $1.276 million to $845,663, as cash flow increased to $72,904 from negative $1.679 million.
Canopy Growth (TWMJF)
TWMJF is also a medical marijuana company out of Canada. In its most recent report, the company mentioned revenue jumped 22% over the first fiscal quarter of 2017, and 245% over the second quarter of fiscal 2016. While it hasn’t proven itself to be profitable, sales growth is powerful. Over the last nine quarters, total sales have grown 63% on average to $6.47 million in its third quarter from $1.84 million a year earlier.
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