Marijuana is undoubtedly in high demand. Since the beginning of the year, the demand for the intoxicate has gone nowhere but up. Despite this, companies have been racing to up their production of the substance to continue to meet this high and growing demand.
One of the biggest factors to this is the amount of capital being poured into massive new grow facilities. Company’s at the top of the market in terms of growth capacity have been pouring millions into building out spaces with hundreds of thousands of square feet for growing potential. Looking specifically at the Canadian market, some 500 companies have reportedly applied to have a license that would allow them to cultivate cannabis. This may seem like a solid infusion of products into the market, but it has delayed the time at which companies can receive these licenses. In some circumstances, it can take as long as one year to have a cultivation license approved.
When legalization of recreational cannabis went into full effect back on October 17th, dispensaries quickly ran out of weed with such a high demand for the product. This has highlighted the need at which marijuana needs to be grown in larger quantities. Many companies have been racing to up their grow count, but this takes a very large amount of capital and not to mention the time it takes to build these new facilities.
The Green Organic Dutchman (TGOD) is one of the leaders in the Canadian market. One of the key factors that separates TGOD in terms of a solid investment is the fact that they have been able to massively tap into the organic market on marijuana. The Green Organic Dutchman is known as one of the largest producers of this craft product, and has seen a large amount of success throughout the Canadian market. Many investors have highlighted TGOD as being one of the biggest company’s to watch for potential as we come about the new year.
Innovative Industrial Properties (NYSE:IIPR) is another key player in the marijuana space but in a wholly different way than most. IIPR is an REIT which means that they are focused on the real estate aspect of the industry. This has been described as one of the main ancillary services that marijuana is looking for. As demand is continuing to rise, the need for companies like IIPR is also on the up and up.
One of the benefits of an REIT is that their profits are very predictable given the majority of their business deals being long term contracts. The dividend that the company pays out is also quite high and currently around 3%. Companies that are set up as REITs are required to pay out the majority of their income in the form of dividends which could make them a solid play for the safer investor out there.
The forthcoming year will be extremely telling for the world of marijuana. As demand continues to skyrocket, many companies will continue to try and meet the needs of the fast paced and quickly shifting marijuana stock market.
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