Are Marijuana Stocks Heading In A New Direction?

Are Marijuana Stocks Heading In A New Direction?

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Marijuana-Stocks -Cannabis-road

Although the Canadian medical marijuana suppliers are larger, Medical Marijuana, Inc. (NASDAQOTH: MJNA) is the largest U.S. marijuana stock right now. This excludes a few larger biotech companies dealing with the development of cannabinoid drugs. Medical Marijuana, Inc. has a market cap of slightly less than $300 million which is surprising in an industry where the annual revenue is projected to hit somewhere in the $50 billion range within the next ten years.

The only answer to this is that the marijuana industry is getting ready for bigger companies to step forward and claim their place; and who better for the job than the tobacco giants such as: Altria Group (NYSE: MO), Philip Morris (NYSE:PM), and Reynolds American (NYSE: RAI). So, is there a major change coming to the medical marijuana industry with big tobacco entering the scene?

Will Marijuana Stocks Make Their Own Path?

In the 1960s and 70s rumors floated around stating that the major tobacco companies were considering going into the marijuana market and that some were trademarking brand names for their potential marijuana products. The rumors led to many denials by the companies themselves and that put the idea to rest for a short amount of time.

On April 1, 2016, the website Abril Uno published an article titled “Philip Morris Introduces Marlboro ‘M’ Marijuana Cigarettes.” The article stated that “the company has been high on the idea of marketing cannabis, and has been monitoring it for some time.” As the name of website translates to ‘April first’, this had been an interesting April Fools’ Joke despite the serious possibility of it occurring.

The overlap possibilities between the tobacco companies and medical marijuana industries are large with some big tobacco companies even entering the vaping market. In 2014, Altria acquired the e-vapor business of Green Smoke for $110 million. In 2013, Reynolds launched its e-cigarette brand named Vuse.

Now yes, that’s not the same thing as entering the marijuana market, but when looking at the numbers for projections in the industry, it only makes sense that there is a place staked out for the large tobacco companies. In the next ten to fifteen years, we may see a large jump in the medical marijuana industry done by big tobacco entering the scene.

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