The legalization of marijuana in Canada has done wonders for the industry as a whole. Canada is the first major economy to legalize cannabis for medicinal and recreational use; the multi-billion dollar industry is promising big returns for early investors.
As the old saying goes, “The best time to invest was yesterday. The next best time is today.”
Not all marijuana stocks are sure-fire investments. A lot of investors who got overly excited about the marijuana industry saw their fire dulled after a few months when things settled down. Alongside the potential of each stock, you have to consider political factors and where the marijuana industry is headed in Canada, North America, and beyond.
Before you start investing, do some research and watch as 2019 brings new hope and new partnerships throughout Canada’s legal weed industry.
Investing in Cannabis Stocks: What To Watch Out For
The largest U.S. Pension Fund, CALPers, recently left financial analysts scratching their heads when they revealed investments in the marijuana industry. Investing in marijuana itself wasn’t the issue – it’s a great time to put money into cannabis. The stocks themselves were questionable choices. CALPers invested in Insys Therapeutics (INSY) and Tilray (TLRY,) a Canadian marijuana producer.
Let’s talk specifically about Tilray. It’s been an exciting ride to watch, but not necessarily one that investors want to hop on in 2019. In August, shares were selling for $25…in September, it hit over $200. But the growth hasn’t been consistent. As of mid-December, shares were selling for around $70. Tilray has been a hot name in the marijuana industry, but most experts are hesitant to recommend it to investors, especially in early 2019. The stock’s IPO lock-up period ends on January 15; at that time, insiders have the ability to sell their shares and it’s unclear how that will affect the stocks.
Ups and Downs
This volatility isn’t just limited to Tilray. Before you invest, it’s important to remember the marijuana industry is subject to big changes, especially in the United States. Our neighbours to the south still list marijuana has a Schedule I drug, which means there is still little access for researchers who want to study its effects.
Additionally, the country’s last Attorney General was passionately against the legalization or use of marijuana – when he was ousted, stocks soared. It’s unclear how the acting Attorney General will approach the issue of legalization, or whether he will be given the permanent job in the first place. With many companies hoping to gain profit from the 33 states who have legalized marijuana for medicinal or recreational use, politics in the U.S. greatly affect the global cannabis industry.
Luckily, our home country doesn’t have to worry about heavy restrictions any time soon. Canada is enjoying the recent legalization of marijuana. Many eyes are looking specifically toward Canadian companies who could make big profits throughout Canada (and the world) in 2019.
Consider These Investments in 2019
Innovative Industrial Properties Inc. (IIPR)
If you are more comfortable investing in real estate, you can combine your interests with Innovative Industrial Properties (IIP.) IIP is an REIT that owns medical marijuana facilities in eight states. Although medical marijuana is legal in 33 states throughout the United States, the country could potentially increase those numbers in the near future. IIPR is a worthy stock to consider if you are looking for long-term gains.
Cronos Group, Inc. (CRON)
Cronos Group, Inc. was the subject of big headlines in early December 2018, when Altria announced that it would acquire a 45% stake in the company. Altria, one of the world’s largest tobacco producers, aims to eventually up their stake to 55%. The validation is exciting for Cronos and stockholders; the $1.8 billion all but secures cannabis’s future spot as a household product with the status of cigarettes. This deal is one of the first big partnerships that look promising for the cannabis industry as a whole.
The Green Organic Dutchman (TGOD)
As of December 14, TGOD stock could be purchased at the lowest prices the stock saw all year: $2.22. Within a few days, they partnered with HelloMD, a service that allows patients to find doctors who want to prescribe medical marijuana. They also have promising international partnerships with Jamaica’s Epican and Mexico’s LLACA. They acquired HemPoland, a top European CBD brand.
The Green Organic Dutchman is one of two certified organic cannabis producers in Canada. That alone should set off some bells. Some experts say that they are late to the party…but if you are just starting to invest in marijuana, they would say that about you, too.
Another thing to note about TGOD is their plans to build an empire in the beverage industry. Marijuana isn’t just for smoking; weed beer and weed wine are projected to rake in big bucks in Canada.
TGOD has experienced some volatility (especially after their breakup with Aurora,) but with low shares and big potential, they are one of the most underrated stocks in the cannabis industry.
Many experts attribute Tilray’s volatility to the excitement of the marijuana industry. Investors get excited, prematurely buy up a bunch of marijuana stock, and watch as the investment falls flat. This trend is the story of stocks like Aurora or Tilray – but not Cara Pharmaceuticals. The stock hasn’t received as much attention, offering investors the opportunity to slip in now and get gains once the stock becomes hot later.
Cara Pharmaceuticals has not been completely out of the spotlight. It has received praise for a successful 2017 and 2018 with high potential for 2019. The biotech company is currently in stage three testing for the Korsuva injection, which may serve as an alternative to opioid painkillers in the United States, Japan, and South Korea. (Cara Pharmaceuticals is also developing pain management solutions with cannabinoids, which is why it appears in our recommendations for marijuana-related stocks.)
If trials go well for the Korsuva injection, investors could see their stocks reach huge numbers. They are definitely a stock to watch throughout 2019.
Canopy Group Corporation (CGC)
Let’s end this list with the largest marijuana stock on the market. Canopy Growth Corporation is huge, boasting over 1.3 million square feet for growing space. They plan on playing a big part in the marijuana beverage industry; alcohol brand Constellation Beverages bought a 38% stake in the company in August. CGC also has partnerships throughout the world and is very active in medical marijuana industries throughout Europe, Australia, and Chile.
CGC has broken many barriers in the cannabis industry, and it’s not stopping any time soon. It’s a safer investment that promises steady growth as the marijuana industry in Canada takes off.
Excited yet? Ready, set, invest!