Marijuana Stocks-Continued Consolidation In 2019 Expected

After cooling off in December like a lot of sectors in the stock market, legal cannabis stocks are hot again with astronomical returns to start 2019. MJ, the Alternative Harvest ETF, which includes top ten holdings of Canopy Growth Corp. (CGC), Cronos Group (CRON) and Tilray Inc. (TLRY) to name a few, is up over 40% since January 1, 2019. And there are plenty of smaller public companies in the space seeing similar or better returns as consumers are taking notice of the untapped potential of this industry.

Investors should expect the legal cannabis sector to remain in play and in the news. Politicians have seen both the positive medical effects marijuana can have and the potential tax revenue that can be generated from regulating the industry further. Rep. Earl Blumenauer (D-OR) issued a memo to his party’s leadership that laid out a step-by-step process for how they can pass marijuana legislation in 2019. Additionally, the Democratic-controlled House held a meeting on February 13, 2019 to examine the difficulties that marijuana businesses face in the opening and maintaining of bank accounts. These are just a couple of the forward-thinking discussions being held on a regular basis and expectations are for plenty of future similar plans to open this industry even further.

There have also been several strategic partnerships and acquisitions within the legal cannabis space including some of the below:

  • Canopy Growth Corporation (CGC) received an investment of $4 Billion from Constellation Brands (STZ)
  • Cronos Group (CRON) sold a 45 percent stake to Altria Group (MO) for $1.8 Billion
  • The Hydropothecary Corporation (HYYDF), also known as HEXO, partnered with Molson Coors Brewing (TAP) on a joint venture to develop cannabis-infused beverages.
  • Aphria (APHA) recently rejected a hostile bid from Green Growth Brands Inc. (GGBXF) as they believed the offer undervalues the company considerably.

This is only the beginning of what’s expected to be a thriving industry for years to come. While some companies have already been recognized and started to take the lead, there are other companies that have remained under the radar. The challenge will be finding the ones that have the infrastructure and capability to take advantage of this huge opportunity. will keep you informed and up to date on the companies to keep an eye on and profit from in this industry.