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The cannabis industry is one which has seen significant growth of late due to increasingly loosening regulations worldwide with respect to the green commodity. And in turn, many marijuana stocks have made investors a mint.
In the United States, many large private companies dominate the industry, with fewer publicly listed companies available than other countries around the world due to legal restrictions and differing federal versus state laws relating to cannabis.
Today, I want to look at three up-and-coming publicly listed marijuana stocks that are headquartered either here or abroad, but all of which are available to U.S. investors. Naturally, these three have significant risks given their size and the uncertain cannabis market, but they all also have outstanding potential upside as well.
If you have a stomach for risk, feel free to continue.
Marijuana Stocks to Buy: Kush Bottles (KSHB)
Market Cap: $110 million
Kush Bottles Inc (OTCMKTS:KSHB) is a budding (excuse the pun) American cannabis-related business, focused on providing packaging, supplies and accessories for cannabis producers, aiding these firms in their branding and packaging needs.
With the market size for marijuana exploding in the U.S., firms supporting marijuana producers and retailers in selling more product will be in high demand moving forward.
As a company closely tied to the success of the marijuana industry overall, KSHB has a unique and increased level of exposure to industry legalization developments and positive or negative developments moving forward. With the industry in general moving in a positive direction, and legalization efforts in new states providing an ever-growing market for KSHB, investors who are betting on a large-scale national movement may want to consider getting into this company at current levels.
But fair warning: KSHB is traded over the counter, and not on a major exchange, which means it’s not required to report quarterly financials, nor does it have to follow other regulations that the exchanges require. Also note that this is a $110 million company by market capitalization that trades less than 100,000 shares daily at prices around $2 per share.
I believe KSHB can hit all-time highs around $5 — which it reached earlier this year — but it doesn’t take much to send this stock moving in either direction. Only use speculative funds for this one.
Marijuana Stocks to Buy: GW Pharmaceuticals PLC (GWPH)
Market Cap: $2.5 billion
GW Pharmaceuticals PLC (NASDAQ:GWPH) is a British biopharmaceuticals company traded on the Nasdaq exchange, and is one of the largest and long-standing publicly traded marijuana stocks in the world.
The company was founded in 1998 and produces a range of medical products derived from the cannabis plant. The company features an internationally approved product, Sativex, which it markets in partnership with Bayer AG (ADR) (OTCMKTS:BAYRY) and Novartis AG (ADR) (NYSE:NVS). But the product exciting investors is Epidiolex, a pure plant-derived canabidiol or CBD medicine used for treating a range of diseases with severe infant-onset, drug-resistant epilepsy syndromes. The drug currently is in Phase 3 testing.
GWPH is largely considered to be one of the primary pioneers in the “cannabis as a cure” movement, with the company scientifically proving the effectiveness of its drugs, getting approvals from many drug agencies around the world. This includes an Orphan Drug Designation from the U.S. Food and Drug Administration for Epidiolex.
GW Pharma has a fantastic pipeline of new cannabis-related medical products being tested at the moment, which are fully laid out in the company’s financial statements. Among the conditions looking to be treated are autism spectrum disorders and neonatal hypoxic Ischemic Encepholapthy, or NHIE — the drugs looking to treat these conditions are currently in different stages of development.
But right now, all focus is on the $700 million market potential of Epidiolex, and whether the FDA will give it the green light.
Marijuana Stocks to Buy: Aurora Cannabis (ACBFF)
Market Cap: $835 million
Aurora Cannabis Inc. (OTCMKTS:ACBFF) is not the largest publicly traded cannabis company in Canada, but is in my opinion the Canadian marijuana company with the largest growth potential moving forward.
Competing with two other firms for control of the Canadian market for marijuana — Canopy Growth Corp. (TSX:WEED) and Aphria Inc. (TSX:APH) — ACB has taken the lead among the group in terms of cost control and production efficiency, starting construction on a state-of-the-art production facility totaling 800,000 square feet in Leduc County, Alberta. This facility will span more than 16 acres and be the “world’s largest, most advanced, automated cannabis production facility” upon completion.
The “Aurora Sky” facility will maximize the production efficiency of its square footage via new technology and an enhanced layout, with the facility’s ultimate production capacity totaling more than 100,000 kilograms (220,000 pounds) annually. ACB will be well-positioned as a cost leader to go after global market share, as its fellow competitors have begun to do, exporting its high-quality, low-cost product abroad to other jurisdictions allowing the import of medical or recreational marijuana.
As of this writing, Chris MacDonald did not hold a position in any of the aforementioned securities.