If you want to make some extra cash, this might be a great time to invest in cannabis. And no, we don’t mean buy edibles wholesale.

2020 has been a banner year for cannabis. According to Leafy, the legal sector recorded sales of more than $ 18 billion, an increase of 71% from the previous year.

RELATED: Sales of recreational cannabis soar despite COVID-19

Meanwhile, the number of States legalizing cannabis grows every year. Sixteen states in total have legalized recreational cannabis (three of which became legal this year) and 36 states have legalized medical marijuana.

With more and more states legalizing cannabis, the cannabis industry is gaining more and more acceptance. And the more accepted the industry, the faster it grows. This is why every celebrity seems to have their own brand of CBD these days, and there is a cannabis product for just about any market segment (even grandmothers).


But you don’t have to be a cannabis entrepreneur to jump on this bandwagon. You can invest in cannabis stocks. And, as you can probably imagine, that decision could pay off some nice rewards.

RELATED: Meet the New Face of the Cannabis Industry: Your Mum

We spoke with Jon Decourcey, Equity Research Analyst at Viridian Capital Advisors, a cannabis capital advisory firm (yes, that’s a thing) about why investors should consider the cannabis industry and which cannabis stocks have the greatest growth potential by 2024.

According to Decourcey, there has never been a better time for U.S. investors to invest in the cannabis industry. The reason? Simply put, it’s about to boom.

“Cannabis is an entirely new growth opportunity in the United States,” Decourcey said. “For all intents and purposes, the industry didn’t exist a few years ago. Now, it has become very common in states where it is legal, and we know it will increase as more states legalize cannabis. Think Texas – it has about twice the population of Canada, and there are only a handful of licensed medical marijuana dispensaries in the state. There is a huge opportunity there.

Decourcey said the pandemic had a lot to do with making cannabis the flagship that it is today.

“Cannabis was considered an essential product at the start of COVID-19”, said Decourcey. “It has helped the cannabis industry a lot. Then cannabis presented the potential to be a sort of white knight for state governments – a way to help them overcome the economic challenges of 2020 – due to the fiscal opportunity. It is a gold mine for government entities in general.

RELATED: How Legal is CBD Really? Your Complete Guide to CBD Law in the United States

Here are the top four cannabis companies that Decourcey recommends investing in right now. Keep in mind that any investment you make should match your personal financial goals and tolerance for risk.

1. Well-being Ayr (AYR.A)

One of the most popular recreational cannabis brands in the United States, Ayr Wellness is a multi-state operator that has just opened its 50e cannabis dispensary. The company has plans to bring that number to 60 by the end of 2021.

Over the past year, Ayr Wellness share has grown by over 360%. Decourcey says they have “done a good job building a sustainable business and as they expand into other states.”

2. Lowell Farms (LOWL)

Formerly Indus Holdings Inc., Lowell Farms is one of the leading recreational cannabis brands in California. The company bought Lowell Herb Co. earlier this year.

“Lowell Farms is really expanding its operations into California, which is the biggest market for cannabis,” Decourcey said. “They bought another leading brand in the state this year and are set to expand in the near future.”

3. Gauge (GAGE)

Michigan-based Gage Cannabis is the new idea of ​​the co-founder and former CEO of Canopy Growth, the world’s largest cannabis company that was recently valued to over $ 18 billion. Decourcey says Gage aims to consolidate Michigan’s fragmented cannabis market.

“Michigan doesn’t have a lot of big cannabis companies, even though it’s one of the biggest cannabis markets in the country. Gage is trying to be the big fish in this pond – they want to be a big public player there and should scale up their operations considerably. “

4. Planet 13 (PLTH)

If you’re looking to invest in something a little off the beaten path, Planet 13 might be more your speed. This huge recreational cannabis dispensary is located in the heart of Las Vegas, and its tourist appeal usually makes it a huge source of money. That wasn’t so much the case during the pandemic, but Decourcey still sees a lot of potential in this stoner monument.

“They raised a lot of money last year. And since they’re usually a huge cash cow and things are opening up again, they’re really set for an expansion this coming year, ”Decourcey said. “These guys delivered everything they said they were going to do. I could see a world where they would be a lot bigger in about two years, until they spread to other states. “

Since the cannabis market is so new, Decourcey said he recommends taking advantage of the growth potential and declining share prices of small companies at this point.

“Multistate operators are the biggest players in the space, but I don’t think they’re the most interesting right now. They don’t have a lot of growth ahead of them and they already have knowledge of investors, ”Decourcey said. “You have higher growth potential for smaller businesses – there is less overhead, there is still potential for them to expand into other states, and the investor base is probably small. “

Although new, cannabis companies have come a long way since their IPO in 2017. Because cannabis is not federally legal, market challenges and the lack of traditional banking have made it almost none of the first cannabis companies. that went public kept their promises in their IPOs (initial public offerings). Decourcey says those who survived have learned from their past mistakes and are better off because of it.

“You envision an industry a few years after the initial IPO process. These are no longer stories on paper, they are companies that are genuinely ready to capitalize on growth opportunities. These guys have righted the ship and they’re working great now. “

However, if you still have doubts about the risks of investing in cannabis, you can always start by investing in a cannabis mutual fund. A cannabis mutual fund will spread the investment risk and favor smart, well-run businesses.

As with everything, Decourcey says common sense is essential when investing in cannabis.

“In cannabis, the bottom line is that if it sounds too good, it probably is. These are still companies with very early stakes, and their pitches are often theoretical. Try to find real investments with traditional approaches and a history of keeping their promises. “

Elissa Esher is an associate editor at GreenState. Her work has also appeared in The Boston Guardian, Brooklyn Paper, Religion Unplugged, and Iridescent Women. Send your inquiries and advice to [email protected]

This article first appeared on GreenState, a cannabis lifestyle blog owned by Hearst.



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