1933 was an important year for U.S. investors. That was the year the 18th amendment was repealed.
This regulatory breakthrough accomplished two things. For one, it once again made it legal to drink a cold beer after work.
Then, it unleashed one of the best investment opportunities of the century, setting the stage for a billion dollar wealth transfer and giving birth to future global leaders such as Anheuser-Busch InBev SA NV (ADR) (BUD) and Brown-Forman Corporation’s (BF.B) Jack Daniels brand.
If you weren’t around back then to capitalize, don’t worry.
Today, that same cycle is repeating itself. Cannabis is being legalized all across North America.
In the United States, 25 states have adopted medical marijuana programs. Three states have legalized recreational consumption. The list of cannabis-friendly states continues to grow. Nine states are set to vote on cannabis initiatives on Election Day (November 8).
In Canada, medical marijuana is already legal on the federal level. Prime Minister Justin Trudeau and the Liberal Party are making it a top priority to also legalize recreational cannabis. It is possible an initiative could be voted on in Canada within the next 12 months.
In Mexico, it’s already legal for citizens to carry up to an ounce of cannabis. In April, Mexican President Enrique Peña Nieto suggested implementing a national medical marijuana program. Although such an initiative still looks years away, it signals an important shift in sentiment.
This recent wave of legalization has given birth to the fastest-growing industry in North America. Market research firm Arcview is projecting North American legal cannabis industry sales to grow more than 200% in the next four years to $22.8 billion.
Just like in 1933 when the federal government repealed the 18th amendment, this billion-dollar wealth transfer is creating a great investment opportunity.
One way to capitalize is with U.S. stocks such as Terra Tech Corp (TRTC) and Kush Bottles Inc (KSHB).
However, cannabis use in any form, medically or recreationally, is still illegal on the federal level in the United States. That creates more legal risk for companies operating in the U.S cannabis industry.
A safer way to invest is looking north of the border into Canada. Canada’s cannabis market is still a fraction of the size of the U.S. market. But unlike the United States, medical marijuana is legal on the federal level in Canada. This is an important distinction for investors looking to curb risk in this frequently volatile industry.
On that note, here is a list of the four largest medical marijuana companies in Canada by market cap.
| Name | Ticker | Market Cap |
|---|---|---|
| Canopy Growth Corp | TSE: CGC | $620M |
| Aphria | CVE: APH | $342M |
| Aurora Cannabis | CVE: ACB | $229M |
| Organigram Holdings | CVE: OGI | $161M |
From this group I have chosen to highlight OrganiGram Holdings (OGI). Headquartered in New Brunswick, it operates two production facilities on 5.5 acres with 78,500 feet of potential production space.
Despite its size, OrganiGram hasn’t been around for very long. The company was founded in 2014 after receiving a production permit under Canada’s Marihuana for Medical Purposes Regulations (MMPR).
But what I find most interesting about OrganiGram is that it’s the only Canadian medical marijuana company that is certified organic. That unique selling proposition has been fueling the company’s incredible growth.
OrganiGram’s revenue is up 228.6% in the last 12 months. Take a look below.
That incredible sales growth has sent shares soaring: OGI is up 204% in 2016.
Despite those gains, I am expecting more of the same. The market leader is making aggressive moves to capitalize on surging demand for medical marijuana in Canada.
On October 11 Organigram announced the closing of its acquisition of a 136,000 square foot building adjacent to its current property to expand production capacities.
Risks To Consider: Optimism in the medical marijuana sector has been red-hot. That’s why OrganiGram shares are up more than 204% this year. That is a clear signal investors are expecting big things from this company. If OrganiGram misses short-term expectations, I would expect shares to see a sharp pullback.
Action To Take: OrganiGram is an early leader in the fastest growing industry in North America. The company’s status as the only certified organic producer in Canada gives it a unique selling proposition over the competition. Look for a pullback below $2.50 and then buy for the long haul.
P.S. Marijuana isn’t the only medical investment you need to be making. A life-saving device could soon be rolled out to 5,627 hospitals and medical facilities across the country. It’s already at work in California, where it is on track to save 15,000 lives this year. And only one tiny company produces it. This puts it in control of a $34.5 billion market. How much you stand to gain as an investor is staggering. Get the full story NOW…
