Could These Marijuana Stocks Be a Good Long-term Investment?


Observant investors will have noticed by now that the marijuana industry is experiencing impressively fast and consistent growth. Investors in marijuana stocks may also have noticed that the United States isn’t spearheading the bulk of this primarily North American growth, but, rather, Canada is in the lead. Before launching into long term investment recommendations within the pot industry, let’s talk about the ways Canada has modeled legal marijuana growth for other countries and, specifically, how it has edged out all U.S. competition.

How have marijuana stocks in Canada surpassed marijuana stocks in the USA?

The most obvious place to start is the topic of legality.

Medical marijuana is entirely legal – and has been since 2001 – throughout Canada, whereas in the U.S., it is not. Through the oversight of Health Canada (which can be thought of as Canada’s version of the U.S. Department of Health and Human Services), the marijuana industry has finally taken off in recent years. Remarkably, legalizing medical marijuana, alone, has enabled several marijuana stocks in Canada to be profitable in cannabis sales. No U.S. cannabis stock can claim anything close to this kind of consistency in profits.

Canada’s progressive parliament has set the stage for a more expansive environment, while the conservative Republican party currently controls the majority of legislative power in the U.S. government. Among Republicans, barely half of the population support the legalization of weed, according to the most recent Gallup polls. Adding insult to injury, the current Attorney General, Jeff Sessions, seems determined to wage war on the marijuana industry, reverting the nation backwards on several accounts.

Canada’s taxation system has influence over promising marijuana stocks performance.

Recent changes in taxation in Canada have set tax rates on marijuana relatively low; lower, even, than the country’s tax rates on alcohol. The system is also set up to channel tax revenues back into the provinces that bear the most responsibility for front-line weed regulation. This should only prosper the recreational weed industry, once legalization is final, and set the Canadian marijuana stocks market up for greater success. Whereas, in the U.S., much of the taxation burden falls on retail weed consumers to help fill gaps in the budget. This has translated in some states to a tax rate nearing 45%.

Canada has the upper hand in marijuana industry composition, with a handful of major cannabis companies dominating the industry. This “bigger is better” mentality and market monopoly seems to work in favor of the Canadian weed industry, lowering growing costs, providing more opportunities for growing capacity expansion through easier access to capital, and creating a brand presence that is more visible.

The marijuana stocks market in the U.S.A. is highly fragmented in comparison to marijuana stocks in Canada.

Whether or not there are any major industry players is questionable. Instead, the industry is dominated by mom-and-pop growers and dispensaries, which lends itself to higher growing costs and lack of consistency in pricing. The ramifications of this clearly point toward more difficulties for U.S. based cannabis companies to compete with black market prices.

Here are several marijuana stocks to invest in as long term ventures all within Canada.

None of these companies will come as a surprise to those seeking marijuana stocks to invest in for the past year.

1. Weed stocks with Aurora Cannabis (NASDAQOTH:ACBFF): $304.8 million estimated sales for 2019

This powerhouse is the likeliest candidate, according to Wall Street predictions, to surpass $300 million in total sales in 2019. This amount figures in annual sales from Aurora’s acquisition of CanniMed Therapeutic (NASDAQOTH:CMMDF), which will contribute an additional $110 million. This acquisition will increase Aurora’s medical patient network by 20,000 and afford the company an additional 19,000 kg in funded capacity.

Between their Aurora Sky facility and the expected yield from their Denmark joint venture partnership, along with other facilities, those researching marijuana stocks to buy now will want to know Aurora predicts between 240,000 and 270,000 kg of cannabis ready for delivery by 2019 – pending approval from Health Canada.

2. Marijuana stocks with Canada’s Canopy Growth Corp (NASDAQOTH:TWMJF): $251.2 million estimated sales for 2019

Under ideal conditions, Wall Street estimates sales for Canopy Growth exceeding $393 million. This places Canopy Growth ahead of Aurora Cannabis, even with their acquisition of CanniMed.

As for greenhouse facilities, Canopy Growth has an astonishing 3.7 million square feet either under construction or still in development phases in British Columbia. Their channel for highly visible brands, distribution partners and retail locations is impressive and offers the company a substantial boost over its competitors. All things considered, most analysts believe among growers, Canopy Growth will claim the largest share of both the recreational and medical marijuana markets in Canada.

3. Aphria (NASDAQOTH:APHQF) marijuana stocks in Canada: $146.2 million estimated sales for 2019 + Nuuvera acquisition

Aphria looks good on the surface when it comes to cannabis production, with 230,000 kg expected by 2019. All this comes from its joint venture partnership with Double Diamond Farms, its four-phase flagship project, and its Broken Coast Cannabis acquisition.

The guesswork comes in with Aphria’s acquisition of Nuuvera (NASDAQOTH:NUUVF), which won’t expand production levels, but, will increase Aphria’s global footprint to 11 countries. The value of this is hard for Wall Street to quantify, but the expansion of Aphria’s distribution network will certainly be worth something – potentially bumping sales up to $175 million by 2019 which may be of interest for those seeking marijuana stocks to buy now. 

4. Marijuana stocks with Cannabis Wheaton Income Corp (NASDAQOTH:CBWTF): $150 million  estimated sales for 2019

This newer cannabis-based royalty stock – the first of its kind – is also considered a wildcard with no Wall Street estimates for sales. Its role as a silent partner to all sizes of growers makes it an intriguing possibility when considering marijuana stocks to invest in. Cannabis Wheaton manages to avoid its own construction, production, and maintenance costs by funding others and purchasing marijuana in return at lower-than-market cost, which they turn around and sell at market rates.

5. MedReleaf (NASDAQOTH:MEDFF) marijuana stocks: $119 million estimated sales for 2019

MedReleaf is the newest of the group and, come 2019, anticipates roughly 210,000 square feet of growing capacity when the expansion of their Ontario facility is finished.

What sets it slightly apart from other marijuana stocks in Canada is its investment in high-quality cannabis extracts and oils, which have higher profit margins.

(For more marijuana stocks to invest in, read Growing Like Weeds: Some of the Best Marijuana Stocks for Aggressive Investors.)


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