Legal marijuana sales across the U.S. soared on April 20 of this year, a date of underground significance to the cannabis community. The annual weed-smoking holiday caused tokers to come out in full force this year, and the dramatic sales increases should attract some attention to marijuana stocks.
Colorado and Washington state, both of which have legalized the recreational use of marijuana, saw some heady revenue growth this 4/20 holiday. Sales in Colorado jumped 53% year-over-year to $7.3 million that day — the most of any day in recorded history.
4/20 sales in Washington actually doubled year-over-year. So, all these meteoric gains raise the question: Just what can an investor do about this? Thankfully, there are a few marijuana stocks that give investors the ability to capitalize on this upstart trend.
Marijuana Stocks for the High-Minded
A little advice for the wary individual investor: Stay very wary. Marijuana investing is a nascent industry, and there are more than a few penny stocks parading around as the next big thing.
One of the far more legitimate bets in the industry, however, is GW Pharmaceuticals PLC-ADR (GWPH) stock. Technically, it’s a healthcare stock: It works to develop cannabinoid prescription drugs, and its shares are up 22% in 2016, buoyed by positive Phase III trial data that gave GWPH stock investors hope.
Last year, GWPH generated $28.5 million in revenue, so it’s abundantly clear that the company has high aspirations.
You’ll note that there are simply no industry heavyweights at this stage in the game. Marijuana stocks as a whole remain fairly speculative, largely due to legal considerations that make going into business risky.
But with high risk comes high potential reward, and companies like OrganiGram Holdings I Com NPV (OGRMF) and Canopy Growth Corp Com NPV (TWMJF) both embody that dynamic. OGRMF and TWMJF are Canadian-based companies that, in addition to trading on over-the-counter exchanges in the U.S., trade on Canada’s TSX Venture Exchange.
Organigram trades on the TSX Venture Exchange under the symbol OGI; Canopy Growth trades under symbol CGC.
Both OGRMF and TWMJF are marijuana stocks that make their living peddling medical marijuana. However, with recreational marijuana not currently legal in Canada, the hope is that when laws become more lenient, both companies will become leaders in that field.
Canada’s Health Minister Jane Philpott has previously been on record as saying legislation will be put forth in spring 2017 that will “keep marijuana out of the hands of children and profits out of the hands of criminals.”
Like GWPH, both OGRMF and TWMJF actually have some love from institutional investors behind them, with Fidelity Institutional Asset Management holding a 1.6-million-share stake in TWMJF and Ark Fund Management holding 276,000 shares of OGRMF.
Remember, when it comes to marijuana stocks, there are no sure bets. Always do your own research and double-check a company before investing. But with the industry growing by leaps and bounds, betting on high times to continue isn’t the craziest idea in the world.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at email@example.com.