The Growth in US Cannabis Stocks in January 2018
Ever since cannabis has been legalized in a handful of states, the US cannabis industry has grown to gigantic proportions. As of the 1st of January 2018, certain stocks have reached unbelievably valuable market caps.
We’ve identified 19 companies that are worth looking at. In this article, we’ll provide a quick overview of the North American cannabis industry and underline some of the most successful companies.
Where Are We with the Cannabis Industry?
Just by taking a look at the number of companies that have come online in this industry, we can say that the industry has been “growing.” However, the market could have grown even bigger if it weren’t for one major issue: Even though marijuana is legal in some, it’s still a Schedule 1 drug at the federal level.
Still, several companies have thrived, even in this environment.
Here is a list of the most successful companies in in the United States and Canada:
ABBV stands for AbbVie Incorporated and is doing extremely well in the US cannabis industry because it owns the famous drug Marinol, which was approved by the FDA.
The drug is used by cancer patients to improve their appetite and prevent nausea and vomiting while going through extensive chemotherapy sessions. Marinol has become such a widely-used drug that ABBV has reached a market cap of over $185.700 billion.
Yes, you read that right – billions. It is by far the grandest pharmaceutical marijuana company in the US, obviously thanks to owning the FDA-approved Marinol.
The fact that it had revenue of over $25.630 billion even in 2016 when things were still a little chaotic in the US cannabis industry, proves that ABBV shoots to kill. An ABBV share is currently priced at $116.34, recording a growth of 3.67%.
SMG, or Scotts Miracle-Gro, follows in the footsteps of ABBV with a market cap of more than $5.210 billion. As of January 2018, a share was $109, marking the stock’s record high. Unfortunately, it dropped to $19 until the end of the same month.
At the moment speaking, a share in the SMG stock is priced at $90.70. It might not be much, but considering they’re just behind ABBV, we could expect SMG to record some good growth during 2018.
INSY stands for INSYS Therapeutics, Inc. and has a current market cap of more than $645.000 million. INSYS stands out from the crowd of cannabis companies due to the fact that instead of selling marijuana-based drugs, it commercializes Syndros – a drug made with synthetic cannabis meant to help patients suffering from epilepsy and anorexia.
As you might expect, the drug is approved by the FDA. An INSY share is quoted at $8.83, which is extremely low. This is the result of too much volatility and it has driven many investors away.
Corbus Pharmaceuticals has a market cap of +$390.700 million, with the price of a share being currently settled at $7.10. Corbus has had somewhat of a tumultuous history, in the sense that it’s one of the most unbalanced companies in the US cannabis industry.
The company has a multitude of drugs in trials, but investors are not eager to jump up with the money until those trials have shown promising results. Even though it operates with a quite large market cap, it could go under or become one of the most successful companies in the industry. It all depends on those trials and their results.
According to the United States Marijuana Index, the total market cap of the industry is $5.83 billion.
The Canada Cannabis Industry
Unlike the U.S., Canada has an extensive medical cannabis program at the national level. Subsequently, the industry there is a lot more well-established and profitable than in the United States.
There are plenty of Canadian companies that are worth investing in, even though they have their ups and downs, just like any other company, regardless of the industry they’re in.
- Canopy Growth Corp.
Canopy is already synonymous with medical cannabis. The corporation features a market cap of over CAD 4.980 billion and a stock share priced at CAD 27.55. These numbers aren’t that bad, considering that Canopy was founded in 2014.
Canopy is federally regulated, which is a huge advantage over other similar companies. At the end of last year, the stock suffered an 11% decrease, but at the time, all companies dealing with medical cannabis were highly volatile.
There is another extremely important advantage that Canopy Growth Corp. has. So, if recreational marijuana is indeed legalized nationwide this summer, the corporation will be one of the very few companies that will be able to increase its profits legally. They can provide cannabis to whomever, since it’s federally regulated.
So, if there ever was a good time to pump some money into a company from the Canada cannabis industry, it’s in the following months.
- Aurora Cannabis
Aurora Cannabis, based in Vancouver, is also federally regulated and one of the most promising companies in the Canada cannabis industry. Believe it or not, Aurora Cannabis actually grows at a much faster rate than Canopy.
It has a market cap of approximately CAD 4.390 billion and a stock price of CAD 10.22, having suffered a quite tremendous drop of 12.65%. That, however, doesn’t stop it from enjoying a huge growth, especially when compared with other companies in the industry.
- Aphria Incorporated
As of January, this year, Aphria has a market cap of almost CAD 3 million and a stock share priced at CAD 15.48. Despite the fact that the stock price might seem low, Aphria actually recorded a 330% growth on it since 2017, which is pretty unbelievable.
At the moment, Aphria makes demarches in getting rid of all the cannabis units available in the U.S., in the light of the insane crackdown from the federal government. If it does not manage to do that, the company will suffer some immense losses.
PharmaCan sports a market cap of a little over CAD 1.220 billion and is an investor-type of company, having 6 other companies under its wing. At the moment, a PharmaCan stock share is priced at CAD 7.94.
Given that in 2017 the company has seen an enormous stock growth of 404%, it’s safe to say that it will do even better throughout 2018 if it follows the same pattern.
Where to Invest: Canada or the USA?
Although it looks like a tricky question to provide an answer to, it’s really not. As we mentioned, the US federal government is foaming at the mouth and planning a major crackdown on the cannabis business, in spite of the fact that many states have legalized it independently.
Canada does the exact opposite: it is estimated that by July 2018, recreational cannabis will be fully legalized. Of course, that cannot be said about the US. Unfortunately, even the states that have lifted the ban on the herb will probably have to make huge sacrifices just to stay in business.
At this moment, the Canada cannabis industry is safer and more transparent than that in the US. There is yet another problem here, and we think it’s very serious: if the American federal government does indeed manage to impose unrealistic limitations on the medical cannabis companies from the States, then the Canadian ones will suffer, too.
There are certain partnerships between the two and it will probably be impossible to keep those going under harsh US regulations. Although we’d all like to hope for the best, the situation is quite bleak right now.
The stock market is extremely unpredictable and even professional investors lack a clean-cut formula that could point towards its future movements. Use appropriate risk-management, and do your research before investing in anything. The Marijuana industry is certainly still on the rise, but the uncertainty regarding regulation, as well as weak investor commitment, means that we are likely to see high volatility for some time to come.