As perception of marijuana in the U.S. shifts from a taboo topic to a legitimate industry, so shifts the backing of marijuana enterprises by politicians and consumers. Last year, Gallup polls reported that the idea of legal marijuana is now favored by 64% of Americans. An independent study from last August suggested medical marijuana has overwhelming support, with 94% of Americans in favor of legalization.
Much of the doubling and tripling of cannabis stock values in 2017 can be attributed to this shift in consumer opinion and the increasing legal sales of weed.
However, wise pot stock investors know there’s a difference between a short-term industry-wide craze and the work of creating a valuable long-term investment. To create the latter portfolio, investors need to consider marijuana stocks’ long term potential by choosing companies whose business models match this potential.
Though the U.S. marijuana market could swallow any other in total sales, due to the unlikeliness of the U.S. federal government changing the classification of cannabis during the Trump administration, with Jeff Sessions as Attorney General warring against the industry, the stage is set for Canadian companies to have some of the greatest successes.
Here are three weed stocks companies in Canada with long-term potential for those seeking marijuana stocks to buy:
Aphria (NASDAQOTH:APHQF) marijuana stocks’ long term potential is backed by growth strategy and proper funding.
Slated as one of Canada’s largest marijuana producers, this company is in the midst of a four-phase project that, by the beginning of 2019, will afford them a growing capacity of 1 million square feet and the production of 100,000 kg of weed annually. The project, costing the company $100 million, is both on schedule for its completion date and fully funded.
Beyond the production project, Aphria has been busy with acquisitions and strategic partnerships. One such partnership, recently announced, is with Diamond Diamond Farms, and will add a projected 120,000 kg of cannabis to their annual production outputs. Essentially doubling its production capabilities through this partnership will enable Aphria to capture more of the early market shares once Canada’s recreational weed legislation is finalized. Aphria is also greatly helped along by its recent acquisition of Nuuvera, which will potentially open up medical marijuana business in 11 foreign markets.
With all these acquisition costs, marijuana investors may see Aphria struggle for a few fiscal quarters, but, the company’s business management team is focused on maintaining long-term profitability. It is, after all, one of only two cannabis companies to generate profits over the past two years.
The long term potential for Cara Therapeutics (NASDAQ:CARA) makes it a worthy candidate when considering marijuana stocks to invest in during 2018.
A clinical-stage drug development company, known primarily for CR845 (a kappa opioid receptor agonist), Cara Therapeutics is another Canadian company whose cannabis stocks have caused temporary stress among investors, but, may prove quite rewarding for those patient investors who are in for the long-haul.
Last year took investors on a roller-coaster as CR845 underwent clinical trials to treat pain and pruritus (itching) in patients with osteoarthritis and chronic kidney disease, with results ranging from mixed to negative and only a few small successes. Cara enters the marijuana industry through the development of a preclinical compound, CR701, the ambition of which is to progress to human trials as an opioid-replacement therapy for pain management.
Again, for investors who have the fortitude to hang in there with Cara Therapeutics, there is hope that CR845 may prove a profitable drug in the future.
Cannabis Wheaton Income Corp (NASDAQOTH:CBWTF) appeals to marijuana stocks investors interested in cannabis stocks that are off the beaten path.
Cannabis Wheaton is considered “the first royalty cannabis company.” The company, whose namesake comes from Wheaton Precious Metals, is involved in the cannabis industry solely through partnerships with growers and financing related businesses who don’t have their own funding for expansion. This royalty model gives them the freedom to act as a diversified investment, without the usual associated fees of mutual or exchange-traded funds.
The company then purchases marijuana through their partnerships at low rates, which they turn around and sell for a healthy profit at market value. As of 2019, the company estimates they will receive 230,000 kg of dried weed to sell, giving them a place among cannabis’ top three sellers and making them an undeniable force in the industry.
(For more recommendations on marijuana stocks to invest in 2018, read Bud Buyouts: 3 Top Marijuana Stocks to Consider.)