The marijuana industry is one of the fastest growing industries in the stock market as its currently raking in billions in sales and is expected to grow even larger with much of the nation favoring legalization.
It was reported that North American legal sales in 2016 grew by 34% to $6.9 billion and are projected to increase by 26% annually to $22 billion in 2021. Another $46.4 billion in marijuana sales were reported for black market revenue for 2016, leaving much room for the legal sector to grow. With over half of the nation favoring legalization, 61% in 2017 versus 27% in 1979, we may see Washington tend to the garden of legalization much faster.
Investing in marijuana imposes risks as well, as does any stock. The U.S. federal government can change the laws at any time leaving the industry in the dust. If you’re the type of investor that doesn’t like to risk losing out on an investment, then marijuana stocks may be for you. Here are a few small cap marijuana stocks that are worth following.
MedReleaf Corp. is a Canadian producer and retailer of dried marijuana and cannabis oils. The company went public five months ago and is one of the largest medical-marijuana companies in terms of market share, in Canada.
The growth of Canada’s medical marijuana market and recreational legalization projected for July 2018 is a good reason to look into the company. But most important is that MedReleaf is already profitable. After reporting a small loss in 2015, the company has profitable ever since. In fiscal 2017, it reported $8.7 million in net income on $31.9 million in sales. This sales figure shows an increase of 100% from the prior fiscal year. Now imagine sales figures when Canada goes full legal.
Insys Therapeutics is over 80% below its all-time high because of its sly tactics to add to the nation’s opioid epidemic with the lead drug, Subsys a synthetic opioid for the treatment of breakthrough cancer pain. Allegations and lawsuits imply that Insys’ employees intentionally focused sales efforts on doctors who frequently prescribe opioid medications.
Although the company is reporting quarterly losses, the launch of Syndros, an oral dronabinol solution a synthetic form of tetrahydrocannabinol (THC) which is the psychoactive element of cannabis. In 2016, Syndros was approved by the FDA as a treatment for nausea and vomiting from chemotherapy and anorexia related to AIDS. Syndros just launched August of 2017 and has the potential to generate over $200 million annually.
Cara Therapeutics is a clinical-stage drug developer with its future reliant on CR845, a kappa-opioid receptor agonist, and CR701, a preclinical cannabinoid-receptor agonist which is being targeted as a treatment for chronic pain
During its phase 2b study for osteoarthritis (OA) of the knee and hip the CR845 generally missed the mark. The drug only hit the mark for the OA trial of the hip at the highest dose for a decrease in mean joint-pain score. Yet, a phase 3 trial including an intravenous version of CR845 continues in patients with postoperative pain.
If approved for postoperative pain, the company can see annual sales of $200 million to $300 easy.