Canada is on the verge of legalization for recreational use, a move that has seen stocks in the industrial boom. The mere likelihood of legalization has seen its index go up by 71% early this year from November last year.
“Green” is about to take up a whole new meaning with expectations running high but finding the right company remains a huge challenge. Even now when there is plenty of opportunity for investors both locally and abroad, analysts are still wary and are warning against risky plays.
However, in amongst all the risks and changes in market trends, here are five companies that will definitely profit from the biggest market trend this year.
#1. GW Pharmaceuticals (NASDAQ: GWPH.)
This giant pharma company has been around for a long time but never has it been on the verge of revolution like it is now. With the approval to produce Epidiolex from the Federal Drug Administration, they are about to take their game to the next level. In fact, According to Evaluate Pharma, the drug is expected to make 10 biggest new drugs of 2018.
This will be the first time FDA approves a ‘green’ drug for Americans and GW pharma will be reaping the most benefit from this news.
Epidiolex helps reduce seizures and will be the mark of a new beginning to ending the use of opioids. For years, industry leaders have argued that this is a better alternative but their advice has not always landed to the right years. However, it seems change is in the air and GW Pharma is leading the charge to federally-approved green-based drugs.
#2. Invictus MD. (TSX-V: GENE, OTCMKTS: IVITF, FRA: 8IS1)
Invictus, “ owns and operates two cannabis production facilities, both with sales licenses, under the ACMPR in Canada, with the vision of producing a variety of high quality and low- cost products to the global market, as regulations permit. The Company’s wholly owned subsidiary, Acreage Pharms Ltd. (“Acreage Pharms”), is located in West-Central Alberta. Invictus also owns 50% of AB Laboratories Inc. (“AB Labs”) located in Hamilton, Ontario. AB Ventures Inc. (“AB Ventures”) owns 100 acres of land near Hamilton, Ontario, to be used for future cultivation.. Recently, the Company announced that it has entered into a binding letter of intent for an option to acquire 100% of the outstanding shares of an applicant (the “OptionCo”) under the ACMPR.
Combined, the licensed producers owned by Invictus expect to have approximately 332,000 square feet of cannabis production capacity by the end of 2018. There capacity will reach 822,000 square feet of production by the end of 2019 in line with Canopy Growth one of the leaders in the space.
#3. Canopy Growth (NASDAQOTH: TWMJF)
With almost every other ‘green’ stock falling, Canopy Growth stocks went up by 10% which not only tells you that they are undoubtedly the biggest company in the space but also how confident investors are with the companies performance.
The company which has grown by 292% in the past year is now set to become even bigger. In anticipation of legalization, Canopy Growth has seven facilities totalling 665,000 square feet and is developing greenhouses on 3.7 million square feet in British Columbia. This kind of assets would mean that the company would be Canada’s largest grower.
The company has also applied to be listed in the NYSE and if successful would boost it to a fortune 500 company. A first of its kind.
#4. Scotts Miracle-Gro Co. (NYSE: SMG.)
Scotts Miracle is a household name in the gardening industry and has emerged as one of the lease riskier ways of investing in the boom that looms Canada. The company that is making over $250 million from hydroponics holdings will now make much more than that with its acquisition of Sunlight Supply. A deal that cost them $450 million.
The move into hydroponics will ensure that the company comes up on top amongst industry players. These moves have proven profitable although slowly and stable in 2017 but with the legalization happening soon, the sales are almost certainly going to double up.
#5. Aurora Cannabis (NASDAQOTH: ACBFF.)
This company means business, they have recently made one of the biggest acquisitions in history by taking over MedReleaf (NASDAQOTH: MEDFF) for $2.5 billion. Not long ago they also took over CanniMed for $852 million.
With these two acquisitions, Aurora plans to be the top grower in the industry and the company CEO Terry Booth is not shy about putting money where his mouth is.
Although its stocks have begun to fall after having a great start, legalization of the product would have the company back on its feet and many millions in no time.
Other notable companies include;