Long term growth is one of the most enticing ways to make money in the stock market. Often times it can be difficult to determine where the future of an industry will go in the present day. Marijuana stocks present themselves as one of the newest opportunities to take part in due to the infancy of the industry as a whole. The marijuana market has been subjected to a series of fluctuations since its popularization only a few years ago. Scotts Miracle-Gro (NYSE:SMG) and Tidal Royalty Corp. (OTC:RLTY) are two examples of businesses leading the charge in this sector of the cannabis market. By offering new ways to invest outside of pure cannabis-growth companies, these businesses are able to hold a high level of stability at times when the market can do the opposite.
The ancillary market that is growing alongside cannabis holds within it everything from packaging, shipping and the leasing of grow spaces. Marijuana stocks are looking forward to high price-to-earnings ratios but some investors have been looking for alternative ways to invest in the cannabis market.
The primary way of investing in the cannabis industry for some time now has been with a direct involvement in companies that either grow cannabis or produce a product using the substance within it. Companies like Cronos Group (NASDAQ:CRON) and Canopy Growth (NYSE:CGC) have been leading this charge. The past month has shown however that the amount of volatility within these businesses is relatively high. This can be great for investors looking to day-trade or make a quick profit, but it also presents a relatively dangerous situation for those looking for steady growth oriented companies to invest in.
Often times, the ancillary stocks in the market have been overlooked as they don’t offer the quickest gains in the marijuana industry. The other reason that they may get overlooked comes from the fact that often times, they are hard to find. These stocks can sometimes go under-the-radar of investors looking for stocks with high value.
Kush Bottles (NASDAQOTH:KSHB) is a perfect example of one of the ancillary businesses to take a look at. Kush Bottles is a producer of packaging and bottling for various marijuana products. As legalization efforts go through, we’ve seen an increased amount of legislation showing certain needs for packaging. This is anything from making sure products are tamper-proof for children to ensuring the freshness of a given product. Kush Bottles is based out of California which gives them a substantial amount of access to one of the largest markets in the world. The company, of course, needs to differentiate themselves from the other bottlers in the industry, but undoubtedly they offer a large amount of value for the next few years in the cannabis industry.
Tidal Royalty (OTC:RLTY) similarly presents an opportunity for ancillary investments in the cannabis space. Tidal is a lessor of properties to individuals who don’t want to deal with the stringent regulations of operating a legal cannabis grow operation. The business has a highly predictable revenue stream due to the sheer numbers they can give to investors. This makes the Tidal one of the primary ancillary stocks for investors to watch as the market continues to move forward.
Ancillary industry leaders in the marijuana stock space present an individual and unique value to investors looking for a safer bet in the volatile world of cannabis. Only time will tell how these businesses continue to fair as the correlation with cannabis growth remains incredibly high.
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