Editor’s note: This story was previously published in April 2019. It has since been updated and republished.
Invariably, no other investment class generates as much interest and controversy as marijuana stocks. Within a generation, public sentiment toward legalization shifted dramatically from strongly opposed to mostly supportive. This is largely due to demographics, as the more progressive millennials replace older Americans in positions of influence.
Additionally, marijuana stocks represent a viable economic channel that can help bridge the gap for many states’ financial issues. For instance, green-friendly Colorado enjoys significant tax revenues from its botanical industry. I don’t see this trend changing for the worse anytime soon, as awareness and popularity is only increasing.
Of course, cannabis isn’t without its controversies. Primarily, the federal government classifies marijuana as a Schedule I drug, putting it on par with hardcore narcotics like cocaine. Thus, no matter how liberal some states become toward their agricultural ambitions, the specter of federal oversight and crackdowns keeps many entrepreneurs and businesses away.
However, we have one critical exception to the rule: marijuana stocks that specialize in medicinal and therapeutic benefits. For one thing, medical cannabis mitigates the stereotypical image of potheads and general no-gooders. Plus, people experiment with pharmaceuticals all the time. Why not allow these same patients the choice for natural alternatives?
More critically for marijuana stocks, the medicinal aspect offers the best chance for international acceptance. Currently, very few jurisdictions allow recreational weed. Given the abundance of traditional and conservative nations, a green world is unlikely. But as Thailand and South Korea demonstrated, medical cannabis is a much easier sell.
As a result, you want exposure not just to marijuana stocks, but also to the therapeutic element. Here are 10 names to consider:
Whenever you have a discussion about cannabis stocks, chances are, AbbVie (NYSE:ABBV) isn’t the first name you think about. One of the healthcare sector’s blue chips, ABBV stock has soared on its vast therapeutic pipeline. We’re talking mainstream solutions for common ailments and diseases like arthritis and plaque psoriasis.
Still, AbbVie maintains some botanical credibility with its Marinol therapy. A synthetic cannabis-based drug, Marinol addresses chemotherapy-related side effects, such as vomiting or nausea. In addition, it helps restore appetite among AIDS patients.
Of course, you should note that Marinol isn’t among AbbVie’s top-selling products. Therefore, you’re only getting limited exposure to cannabis with ABBV stock. But based on the extreme volatility of marijuana stocks, that isn’t such a bad gig.
Emerald Health Therapeutics (EMHTF)
Not that I would know, but growing cannabis allegedly isn’t rocket science. With the right conditions, the right equipment and a reasonable car, anyone can grow their stash. But cultivating the plant so that it addresses specific ailments and symptoms? That takes real effort, which is where Emerald Health Therapeutics (OTCMKTS:EMHTF) comes in.
Rather than just pumping out the green stuff, Emerald deliberately seeks out the strains most effective in addressing patients’ needs. The company provides a wide selection of strains, which range in weight, tetrahydrocannabinol (THC) content, and cannabidiol (CBD) strength. Their impressive portfolio should lift EMHTF stock over the long run, as interest in CBD products accelerates.
It’s important to be careful with pot stocks, though. On a year-to-date basis, EMHTF stock is down nearly 40%. While all cannabis stocks suffer volatility risk, Emerald’s concentration on medicinal weed should help mitigate downside pressure.
Aurora Cannabis (ACB)
I’ve spent a lot of time discussing Aurora Cannabis (NYSE:ACB), and I don’t mean to keep double-dipping into this company. Still, I keep going back for a reason: ACB stock is an excellent play within the medical-marijuana market.
A key factor in my bullishness for Aurora is its management team. In my view, they’re making smart decisions through their acquisitive strategy.
Rather than merely focusing on outright capacity, they’re looking out over the horizon. Aurora’s buyout of Whistler Medical Marijuana gave the organization significant leverage in medical cannabis due to Whistler’s extensive genetics bank.
Furthermore, ACB stock is a strong performer. Since the January opener, shares have skyrocketed roughly 70% before plummeting but still has added 24% this year. The inevitable correction should be only temporary. Among marijuana stocks, Aurora is exceptionally well-positioned for sustainable growth.
Cronos Group (CRON)
One of the top names among major marijuana stocks, Cronos Group (NASDAQ:CRON) naturally attracts a lot of attention. This time, though, they’re attracting the wrong kind.
Prior to its earnings report for the second quarter, I worried about the company’s revenue target.
Hit or exceed it, and management can stave off criticism, but speculators looking for a discounted price may want to put CRON stock back on their radar. Since the beginning of March, Cronos has shed more than 28%. However, the magnitude of volatility has declined noticeably in the past few days.
Plus, Cronos has international legitimacy among medicinally focused cannabis stocks. Featuring partnerships and joint ventures across five continents, the company is ahead of the game.
In business, even the green kind, you can’t get ahead of yourself. So while lucrative opportunities exist in the international sector, CannTrust (NYSE:CTST) remains firmly committed to winning its native Canadian market.
At the same time, CannTrust can’t afford to ignore the rest of the world. Although Canada becoming the first G7 nation to legalize recreational weed generated headlines, our northern neighbors alone can’t support this burgeoning industry.
Therefore, management has focused on the growth and capacity narrative to compete effectively at home and, later, abroad.
To achieve the second leg of this journey, CannTrust teamed up with Denmark’s Stenocare to distribute medical cannabis products in that country.
It also inked a partnership with an Australian firm for similar distribution arrangements. While it’s not the most common name among marijuana stocks, CTST stock provides a risky, but viable, opportunity.
Innovative Industrial Properties (IIPR)
Most marijuana stocks focus on the industry’s front face; namely, production. As I mentioned earlier, marijuana isn’t that difficult to grow. So long as you have the green light legally, the physical barrier to entry is relatively short.
But the real challenge, though, is finding a consistent source of financing. This is where Innovative Industrial Properties (NYSE:IIPR) lends a helping hand.
Despite momentum toward legalization, several financial institutions shy away from cannabis ventures.
Innovative Industrial plugs the gap, offering critical capital through its leaseback business model.
Thanks to the company’s tremendous utility, IIPR stock has lit up the markets. Shares are currently up 123% YTD. Technically, IIPR may have gotten a bit overheated. That said, I wouldn’t get too greedy looking for the perfect entry point. Innovative Industrial levers a proven business model that is only increasing in relevancy.
Terra Tech (TRTC)
Everyone recognizes cannabis stocks for two things: their incredible potential and their equally incredible volatility. Unfortunately, stakeholders of medical-cannabis producer Terra Tech (OTCMKTS:TRTC) find themselves in the latter category.
So far this year, TRTC stock is down around 35%.
And the bad news doesn’t end there. Unlike many other marijuana stocks, Terra Tech has had trouble generating top-line growth.
In its most recent earnings report for the second quarter, 2019 the company reported $10.37 million in sales. After two consecutive down quarters, this could signal that TRTC is redeemable.
So why take a bet on TRTC stock? First, its vertically integrated organization may facilitate significant efficiencies as political momentum increases. Second, I dig their leadership team. The head execs are experts in finance, which should prove beneficial in properly navigating TRTC across choppy waters.
Charlotte’s Web (CWBHF)
When most people look at Charlotte’s Web (OTCMKTS:CWBHF), they’re thinking that they missed the boat. After all, CWBHF stock has jumped 78% since the beginning of this year.
From the opening price of April, Charlotte’s Web shares gained a ridiculous 16%.
As much as I love marijuana stocks, I’m fairly certain that this cannabis firm is due for a pullback. But once that occurs, I wouldn’t waste too much time squabbling over the granularity.
Instead, I’d consider what our own Matt McCall had to say. Thanks to the popularity of CBD, Charlotte’s Web’s CBD-based products could be distributed across mainstream retail channels.
Unquestionably, such an event would launch CWBHF stock into the stratosphere. Moreover, because most CBD products contain no trace of THC, they don’t fall under severe federal guidelines. Therefore, don’t get too greedy looking for an ideal price point when CWBHF corrects.
Cannabis Science (CBIS)
On paper, Cannabis Science (OTCMKTS:CBIS) represents the next evolution among cannabis stocks: pharmaceutical firms that devote their time and research exclusively toward medical marijuana.
Not only that, this is a much-needed development that could lift CBIS stock, as well as the entire botanical industry.
For decades, people unquestionably trusted the mainstream healthcare and pharmaceutical network.
However, the rapidly escalating opioid crisis has proven that well-intentioned medical professionals can lever a tragic impact. One of the underlying causes of this crisis is the addictiveness of prescribed medicines.
Organizations like Cannabis Science can potentially mitigate this situation with naturally sourced therapies free of psychoactive side-effects. That’s the allure for CBIS stock. However, shares trade for less than .03 cents a pop, so this is only for the risk-tolerant.
GW Pharmaceuticals (GWPRF)
On a surface level, GW Pharmaceuticals (OTCMKTS:GWPRF) brings a lot of positives to the table. As pioneers among medicinally-concentrated marijuana stocks, they lever substantial credibility.
Their Sativex drug for addressing symptoms associated with multiple sclerosis achieved better-than-expected results. This only encourages other companies to pursue cannabis-based therapies for many other diseases.
That’s the good news. The not-so-pleasant side of the coin, though, is market performance. While no one mistakes cannabis stocks as stable investment platforms, GWPRF stock is rough for even hardened botanical veterans.
In December of last year, shares fell off a cliff before rebounding back toward low-earth orbit. Since then, it has added 69% so it’s a really volatile stock.
So is GWPRF stock worth a look now? Although I like how the company has stabilized, I don’t care for its low volume. But GW Pharmaceuticals is a penny stock with underappreciated talents. If you have the nerve and the patience, it’s worth your consideration.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.