- (0:15) - Where To Invest In The Marijuana Industry
- (1:30) - Food and Beverage Stock Plays: Constellation Brands & Molson Coors
- (6:05) - Scotts Miracle Grow and Pharmaceuticals Stocks
- (10:30) - Innovative Industrial Properties
- (14:45) - Canada’s Growth In The Pot Industry
- (20:00) - The Future of the Marijuana Industry
- (26:10) - Episode Roundup: TAP, STZ, IIPR, JWPH, SMG, CGC, CRON, ACBFF
Welcome to Episode #141 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by David Bartosiak, the Editor of Zacks Surprise Trader, Momentum Trader and Blockchain Innovators newsletters, to discuss one of their favorite topics: marijuana stocks.
They have discussed marijuana stocks two other times before. Back in early 2017, the investment pickings were slim.
But now, in mid-2018, there are more investing opportunities than ever before, and some older favorites are worth a look at again too.
Maturing of the Pot Stock Industry
Demand remains high for “pot stocks.” For that reason, several marijuana ETFs have now launched and more businesses are looking for ways to get a foothold in the industry.
Investors can now be pickier about what kind of “pot stocks” they buy.
One thing is clear, there are no quick riches in the marijuana stocks. But that doesn’t mean there aren’t buying opportunities for astute investors.
Where to Find the Best Marijuana Stocks Right Now
1. The Scotts Miracle-Gro Company (SMG - Free Report) making potting soil specifically for growing marijuana. It has had a tough 2018 with shares falling 28% year-to-date. Cold spring weather really hit its second quarter. But what about the marijuana business? It’s just a small part of the business but its one of the few companies making a legitimate marijuana-related product in the United States.
2. GW Pharmaceuticals (GWPH - Free Report) is a British biopharmaceutical company that is developing cannabis medicines. It’s lead product is in development to treat rare and catastrophic forms of childhood on-set epilepsy. It’s expected to lose $9.06 per share in fiscal 2018 and another $5.15 in fiscal 2019. Shares are down 3.5% year-to-date.
3. Innovative Industrial Properties (IIPR - Free Report) is a REIT that manages free-standing properties for growing licensed medical-use cannabis. These facilities are operated by state licensed growers. It has buildings in numerous states and has just bought in Michigan, which is one of the largest medical marijuana markets. Earnings continue to be revised higher. It made $0.67 in 2017 and is expected to make $1.19 in 2018 and $2.64 in 2019. That’s triple digit earnings growth. It also pays a juicy dividend currently yielding 3%.
4. Molson Coors (TAP - Free Report) announced on Aug 1, 2018 that it was entering into a joint venture with its Canadian business unit, Molson Coors Canada and The Hydropothecary Corporation, to pursue opportunities to develop non-alcoholic, cannabis infused beverages for the Canadian market. As you might recall, cannabis will be legal in Canada in 2019. Molson Coors is cheap, with a forward P/E of 14.
5. Constellation Brands (STZ - Free Report) announced in the fall of 2017 that it was making a $200 million investment in Canopy Growth in order to develop cannabis beverages. It’s still in the R&D stage but on its second quarter conference call in July 2018, the company said it had realized a gain on its investment of $700 million. However, year-to-date, shares of Constellation have fallen about 5%.
There are other biopharmaceuticals that are in the development stages of cannabis-based therapies and treatments. Additionally, some of the other large food and beverage companies are looking for ways to invest in cannabis food and drink products.
What other stocks could be marijuana investments in 2018?
Are there Canadian companies listed on US exchanges that are now available?
Listen to the podcast to find out.
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