Ah 2019, the year of gains. Well, more accurately the year of the pig, who represents wealth and affluence. Everyone is searching for new and profitable sources of income this year. Naturally, people turn to the stock market for high returns for little to no work. With this in mind, many have turned to one of the fastest growing markets in America to make their investments: the cannabis industry, and therefore the marijuana industry.
In 2019, marijuana was legalized for medicinal use in 33 States and recreational use in 11. In the past 10 years, these numbers have both increased by more than 250%. Cautious investors question whether or not the cannabis industry is really gaining as much traction as the media makes it out to be. With these increased numbers, the high probability of future success is undeniable.
To help investors make well-informed choices when it comes to marijuana manufacturing companies, NASDAQ has released a list of the top five most popular marijuana stocks currently on the market. Updated this past June, the top three companies to look out for this year are Aurora Cannabis, Cronos Group Inc. and Canopy Growth.
Aurora Cannabis is a medical marijuana producer and distributor based in Canada. They are the leading company in international medical cannabis sales. Aurora is known for their convenient service, providing their customers with the ability to order medical marijuana online and have it delivered to them directly.
On July 23, Aurora’s average daily volume, the average number of shares traded daily over a given period, came in at a whopping 19.9 million. This amount is almost four times the daily volume of the second leading company.
Next up is Canopy Growth based in Smith Falls, Ontario. Their appeal to the avid investor is their high market cap at more than $12 billion and their aggressive growth strategy. Canopy is planning on integrating themselves into the U.S. in the coming years.
Canopy Growth’s average daily volume falls at a little more than five million shares. They recently purchased the American cannabis operator Acreage Holdings, attracting an increasing number of investors. Their stock prices are predicted to skyrocket as they carry out their U.S. expansion.
The third most popular stock in the cannabis industry is Cronos Group Inc., another Canadian cannabinoid company. Against all odds, Cronos has come up as the third most popular marijuana manufacturer on the market. Despite stock analysts predicting a price drop in their shares, investors continue to flock to the company.
Cronos Group Inc. does come up short in comparison to Aurora and Canopy. Cronos’ average daily volume is at 4.6 million shares (though this is a drop of more than two million from the previous month). Leading tobacco company Altria recently awarded Cronos Group a grant of $1.8 billion, causing some investors to predict that their stock prices will rise in the near future.
While popularity is an important factor to consider, the most attractive attribute of a company to the investor will of course remain their stock prices. As the legalization of medical and recreational marijuana increases exponentially, so will the stock prices of marijuana manufacturers and distributors.
The profit of the cannabis industry has soared above the stock market as a whole. Where the average return of the stock market is commonly known to hover around 7%, the cannabis industry boasts the possibility of an incredulously high return at more than 300% on average.
Over the past five years, Aurora Cannabis, Canopy Growth and Cronos Group Inc. have each experienced a radical increase in stock prices. This can easily be traced to the recent normalization of marijuana use in Canada since their nationwide legalization of recreational marijuana in 2018.
Cronos Group made the biggest strides with a price increase of nearly 6,138% in the last five years. This is over four times the next leading company, Canopy Growth, whose price increase is still over an impressive 1,443%. While Aurora has taken first place in popularity, they bring up the rear with their price increase of 1,420% (ironic, isn’t it?).
Even over the past year, all three companies have given their stockholders sizable stock price increases. The companies rank again first Cronos, then Canopy and finally Aurora, who have all had a respective percentage increase of 145%, 41% and 23%.
Over the past month, stocks in the marijuana industry as a whole have made a slight decrease. Canopy had the highest percentage decrease of about 12%, Aurora came in second at 11% and Cronos in third with a decrease of only 4.47%.
To the novice stockholder, these recent losses may seem like a bad sign. Many would think the best way to handle their investment is to sell their stock before its price dips any further and reinvest the money somewhere else. Believe it or not, an experienced market player would tell you otherwise.
When it comes to the stock market, the goal is to buy low and sell high. This means that when stock prices fall, it might be the best time to buy shares before the prices go back up.
Of course, in order to guarantee that this trend will reign true, investors should do their research before buying stocks. The marijuana market has a history of dipping and rising periodically, meaning that the best course of action would be to hold on to your stocks even when prices drop.
Another obvious trend to look out for is the long-term potential of massive returns. All three of the aforementioned companies had an increase in their stock prices in the past year. In the past five, each of these companies have experienced an increase in prices well over 1000%. Even though stock prices have fallen in the past month, history shows that it will probably rise again soon.
With these percentages, it is clear that the cannabis industry has the potential to be extremely profitable in comparison to other markets. If you’re looking for a new source of income with an almost guaranteed fantastic return, well, it’s obvious you can find it over by the marijuana plants. With available stocks such as these, the year of the pig has proven to provide the wealth it promises.