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What To Look For In A Marijuana Stock

What To Look For In A Marijuana Stock

The marijuana market has been one of the most lucrative industries over the past several years due to the newness of the market and the continuous expansion throughout the country. With many new stocks popping up in recent times, it seems like faith in the market for investors is continuing to see new highs.

One of the largest markets for cannabis throughout the world currently stands in Canada. The Canadian cannabis market has been valued at over $30 billion, which is for comparison, over half of the market cap of the gold mining industry in the country. Some of the largest players in the Canadian market have been the Canopy Growth Corp. (TSX:WEED), Aurora Cannabis (TSX:ACB), Aphria Inc. (TSX:APH) and MedReleaf (TSX:LEAF). These four are the largest cannabis companies in the country, totaling a $9 billion market capitalization all together.

According to one article “if Canada’s retail market can reach $9 billion in annual sales in a few years — as one bull estimates it will – that would yield only a couple of billion dollars in cash flow to wholesale producers like Canopy. So today’s investors are effectively paying 15 times the industry’s cash flow five years from now, a generous multiple. Moreover, there’s reason to believe these revenue forecasts are overly optimistic.” The Canadian market has been one of the most influential on a global level, adding to the rest of the world market on cannabis. Canada has also represented the largest country to see success in getting close to nationwide recreational cannabis use market.

One of the most influential markets throughout the world is the confusing state of the U.S. cannabis industry. The current legislation being put in place by the Attorney General Jeff Sessions has put the market back by a few years, but things are beginning to look up. The hopes are that the effect of the successful Canadian market will help to bring the U.S. market into the future. The United States will need to catch up sooner or later to the rest of the world’s standing on the issue of cannabis. It is extremely clear that the opinion of the public is very much in favor of legalizing marijuana.

One of the largest players in the market on cannabis has been the company GW Pharmaceuticals (NASDAQ:GWPH). The company has been at the forefront of the research end of the cannabis world. GW has been working to expand the field of research on ailments like epilepsy and seizures related to the condition. The company recently was granted five new patients for their drug Epidiolex. GW has been extremely influential in the market on cannabis due to the fact that they are working on the prescription drug end of the industry. With so much potential for cannabis to become a groundbreaking treatment for a variety of diseases, companies like GW are working to cement the place of marijuana in the medicinal industry. GW has helped to make cannabis related drugs extremely safe, cementing their place for the future of the market.

The market on cannabis has been expanding greatly throughout the past several years. Investments in the market have also grown substantially, helping to give the market a much needed influx of capital. With more capital and investments, the market is poised to continue this high amount of growth throughout the near future. As legislation throughout the country is able to pass, the hopes are high that the market will be able to reach its full potential as we move further into the future. Only time will tell how the high amount of investments continues to effect the industry on pot.


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