How to invest in today’s growing cannabis business

By @chelean on
weed
There’s more to the cannabis industry than just growing weed. Creative Commons

This year can be considered as the biggest year yet for the cannabis industry, with the enterprise showing very encouraging signs of growth in both medical and business scenes. The global demand for cannabis is already shaping and even changing the way we look at the emerging market.

What used to be a product shunned by the more conservative members of society is now being viewed as a powerful substance for a number of major health concerns. Cannabis has become so relevant today that powerful nations and major organisations have recognised its medical and economic potential. 

The most significant event, of course, is Canada implementing the full legalisation not just of medical, but recreational cannabis, but there are other instances that showcase the industry becoming a formidable enterprise. There’s the US FDA’s approval of the first cannabis-infused drug and the World Health Organisation recognising the benefits of cannabidiol (CBD), a cannabis compound, among others.

According to recent data gathered by Viridian Capital Advisor, the Marijuana industry has raised as much as US$4.3 billion (AU$5.98 billion) by the end of July this year. The projected earnings are US$8 billion (AU$11.13 billion), which is more than double from the US$3.5 billion (AU$4.87 billion) earned in 2017.

Therefore it comes as no surprise that entrepreneurial individuals would want to get into the thick of the cannabis business. Now what’s great about this burgeoning industry is that there are many avenues that businessmen and investors can get involved in. Here we try to list some of the best ways to be part of the highly-lucrative cannabis industry:

Focusing on CBD

CBD, for those not in the know, is a compound derived from cannabis plants like marijuana and hemp. For years, CBD has been linked to various medical benefits such as a relief from chronic pain, a mild sedative, an antidepressant and even an aid to seizures brought about by certain types of epilepsy.

Today, CBD is considered to be a burgeoning industry, and CBD from hemp, in particular, is seeing the most robust growth in recent years. Hemp-derived CBD is considered to be the safest and best alternative to marijuana-derived CBD, which could have psychoactive effects. Hemp oil contains only minute traces of THC, the compound associated with getting people high. CBD can be found in a number of products like vapes, edibles, tinctures, and even pet products.

That is why many people have begun trusting hemp CBD that market analysts are predicting a billion-dollar growth for the products in the next three years. This means that CBD businesses have begun to upgrade and establish roots in the industry, making it safer to invest in CBD stocks, which could mean a long-time investment opportunity.

Invest in Canadian companies

If you’re planning to invest in companies already involved in the cannabis business, there are many ways on how to do this efficiently. First to consider of course is that the company is listed. To know this, people can go to different, credible websites like EDGAR, the free web database of the Securities and Exchange Commission (SEC), as well as finance websites like Yahoo Finance and even USA Today’s Money Section, to check if a company is publicly listed. Being publicly listed means that stocks are readily available for individuals to buy.

Now there are a number of credible companies that you can invest in or buy stocks, but choosing notable Canadian cannabis companies could be the best direction to go. According to The Street, companies like Canopy Growth would be one of the best brands to consider. Canopy Growth Corp. is said to be the biggest publicly traded Canadian cannabis grower. Not only is it listed in the New York Stock Exchange, but it also gathers approximately 20 percent of the total sales in Canada’s cannabis business.

Canopy recently got a mammoth support from Constellation Brands, brewer of global beer Corona, with a US$4 billion (AU$5.57 billion) investment (which gives Constellation 10 percent ownership of Canopy). This allows the brand to expand to other parts of the world like Europe, bringing with them stalwart brands like Tweed.

Then there’s also Aurora Cannabis, considered as Canada's second-biggest weed brand. The company is constantly growing, acquiring two new companies which are basically the company’s 11th and 12th deal in the last two years.

Aurora recently bought Agropro, which has 4,000 acres of land that can produce almost 1 million kilograms of organic hemp, promising to answer the growing demand for high-quality cannabis products.

Investing in cannabis verticals

Apart from the products itself, supporting materials and services are also great avenues to explore if you’re planning to invest in the cannabis industry. 

One great example is Smart Cannabis Corp. (OTCMKTS:SCNA), a company that creates innovative support and solutions needed to sustain the cannabis sector. SCNA runs its own cannabis farm/ laboratory to perfect and study the growth of cannabis plants using their own technology.

Through its subsidiaries Next Generation Farming & SAP Investments, SCNA gets to focus on producing innovative tools for growers to maximise its output while SAP Investments helps provide useful information on how to grow a business-wise.

Next Generation Farming is known for spearheading innovative growing solutions in the market. A popular invention is the multi-spectrum SMART by Design greenhouse grow light.

This technology can be operated to promote optimised overall growth and blooming, greatly lowering the time required for a full growth cycle. This product is quite popular among growers and Next Generation Farming was able to sell 60 units within the first week of sales. Then there’s the SMART filtered-Air recirculation system, which helps reduce the emission of odours and airborne microbes that are often the problem of cannabis cultivation.

SCNA is trailblazing cannabis industry support and companies like a cannabis business in Salinas, California bought 648 units of the multi-spectrum glow lights.

All these and more make SCNA one of the most viable companies to invest on today if you wish to get into the potentially rewarding business of today’s cannabis enterprise.

IBT Australia does not endorse any product or practice mentioned here. The article is based on press releases sent for consideration.