5 Companies to Watch as Cannabis Legalization Approaches

5 Companies to Watch as Cannabis Legalization Approaches

FN Media Group Presents OilPrice.com News Commentary

PR Newswire

LONDON, May 17, 2018 /PRNewswire/ --

Get ready to go green. In the coming months, Canada will make history by becoming the very first major industrialized nation to legalize marijuana for recreational use nationwide. If everything goes the way experts are expecting, this September, Canadian lawmakers will be fully decriminalizing the sticky stuff for millions of happy customers in one of the biggest cannabis-consuming nations in the world. Mentioned in today's commentary includes: Canopy Growth Corp. TWMJF WEED, Aurora Cannabis Inc. ACBFF ACB, Emerald Health Therapeutics Inc. EMHTF (TSX-V: EMH), Cronos Group Inc. CRON (TSX-V: CRON).



While California remains the biggest single market for cannabis worldwide, the United States is showing no signs of legalization or even decriminalization on a federal level, making the inner workings of the industry logistically fraught with complications and legislative snares. But now, Canada's move towards legal weed will change everything for the country's economy, with a projected cannabis market of as much as $8 billion.

If consumption patterns in U.S. states where marijuana has been legalized teach us anything, it's that demand is sure to grow beyond current estimation thanks to the availability of edible cannabis products, which account for nearly 30 percent of sales in California, Colorado, Oregon, and Washington.

Meanwhile, the most conservative estimates are projecting that the U.S. market could reach $25 billion by 2020, but if recreational use continues to skyrocket thanks to legalized markets like California and Colorado, high demand could send the market soaring as high as $50 billion by 2026.



These numbers, while impressive, are only telling half the story. The demand is high and getting higher (no pun intended) - but what about supply?



In Canada, current production can meet only a fraction of overall domestic demand for a medical marijuana community of just 300,000 people. What's more, demand is expected to outpace supply until 2021.

This summer, when the market opens up to recreational consumers for the first time, the market could be in desperate need of new investment to keep up with the booming demand. Here lies the golden opportunity for companies ready to get in on the ground floor in what is guaranteed to be a hefty return on investment.

In such a young and popular industry, there are endless opportunities for growth and innovation. Here are 5 companies that we are expecting to play a major role in the rush to meet demand in the coming cannabis revolution:

#1 Scotts Miracle-Gro -SMG 



Scotts Miracle-Gro offers everything that up-and-coming growers are going to need in large quantity: seeds, pest deterrents, in-demand hydroponic equipment, and other grow-op essentials.

A huge segment of cannabis growers utilize hydroponics, the artful science of growing plants without soil. Scotts Miracle-Gro's subsidiary Hawthorne Gardening Company has an entire division devoted to hydroponics which currently accounts for 10 percent of their overall sales, a number that they are expecting to explode come July.

The company has been quite busy making $1 billion worth of acquisitions for their hydroponics sector through Hawthorne Gardening Company, and their largest acquisition yet, $450 million for Vancouver's Sunlight Supply Inc. is slated to close on June 1st. Now, the company is focusing on slashing overhead and duplicate jobs for a savings of $35 million per year after 2019.

Thanks to ever-improving technologies and steadily growing demand, hydroponics has been reliably growing by 20 percent each year, and that rate is poised to rise significantly. Scotts Miracle-Gro, thanks to their proactive approach and aggressive acquisition strategy, is in the perfect position to supply the needed equipment for the cannabis growers that are going to find themselves rushing to keep up with demand in the coming years.

#2 Cannabis Wheaton (CBW: CBWTF)

Cannabis Wheaton has a lot of competition amongst the hordes of Canadian marijuana opportunists, but the small Canadian company is on track to be one of the dominant financiers of the marijuana industry with one distinct advantage - for their investors, they can promise diversified, reduced-risk exposure in a market with skyrocketing demand.

Cannabis Wheaton aims to connect distributors and producers through its standout "streaming cannabis" platform, which allows firms access to capital and markets in this exploding industry, while Cannabis Wheaton collects royalties.

The "streaming" model largely removes investor risk. Instead of putting all your eggs in one basket, Cannabis Wheaton invests in varied producers and distributors, protecting investors against risks like a failed firm or an unsuccessful crop.

Cannabis Wheaton already has 15 partners with 17 production facilities totaling a potential 2.0 million effective square feet of growing space, as well as strong political support and a coast-to-coast network. They have also already established strategic alliances with a national chain of convenience stores, a national chain of independent pharmacies, and other promising distribution partnerships.

The company already has its foot in the door with the medical marijuana industry (they are partnered with 39 clinics with access to 30,000 registered patients), leaving them perfectly positioned to take on the market boom from the coming legalization of recreational cannabis.

#3 Pfizer - PFE

A huge pharmaceutical power offering huge dividends, Pfizer is gearing up for a big year. With a net income of $7.2 billion and operating cash flow of nearly $16 billion, it goes without saying that Pfizer has some serious buying power.

However, after a series of less-than-impressive quarters, Pfizer is looking to corner new markets. The company has recently acquired Anacor Pharmaceuticals, Hospira and Medivation, and is seeing promising growth from innovative cancer and autoimmune drugs.

Meanwhile, the company's current best-sellers are continuing to trend up, with steadily climbing demand for fast-growing drugs like Ibrance, Eliquis, and Xeljanz. Xeljanz could take off in a big way this year if the FDA takes the advice of its advisory committee and approves the autoimmune disease drug for treatment of moderate to severe ulcerative colitis, a $5 billion market worldwide.

Stay tuned for this summer's FDA decision on Xeljanz in addition to other Pfizer trial drugs including lung cancer drugs, lorlatinib, and dacomitinib, poised to target a largely untapped market. Also slated for July, the FDA will be making a decision on whether to expand the application of prostate cancer drug Xtandi (which already gained $159 million in the first quarter) to include patients with non-metastatic castration-resistant prostate cancer, pushing sales even higher.

#4 Canopy Growth Corp. TWMJF WEED

Canopy Growth Corp. is a diversified cannabis firm, with multiple brands, curated strains, half a million square feet of production space, and a $4.35 billion valuation. The bullish company also boasts partnerships with leading names in the cannabis industry, including Tweed, Spectrum Cannabis and Bedrocan.

Canopy has been preparing for recreation legalization for the past few years. Shares in the firm jumped in March 2017 when the Canadian government indicated its push toward this year's full legalization in 2018. That was nothing, however, compared to the last years' astonishing 386 percent growth in stock, gaining the company a reputation as a "cannabis unicorn".

The company continues to boast growing stock prices as stock market speculators sing its praises. As we all know, size does matter, and Canopy blows the competition out of the water in terms of peak annual production potential with what is soon to be 5.7 million square feet of space for cultivation, making it a no-brainer for investors.

#5 Sanofi

French pharma titan Sanofi is playing the long game. With a market cap of $123.99 billion, the company is sitting back while smaller firms do the risky work of early short-term investing and will swoop in for acquisitions once some of the little guys begin to strike gold. With the coming legalization and cannabis boom in Canada, there is sure to be a lot of gold to go around.

Since its IPO, Sanofi has performed at 8.41 percent. Its biggest growth has been thanks to the drug Dupixent, an anti-eczema drug which is expected to reach sales of $4.3 billion by 2022 in the U.S. alone since its FDA approval in March 2017.

Sanofi has also just made a major advancement in the race to enter the fast-growing PD-1/PD-L1 inhibitor market. The company won an FDA deadline of October 28th for a review of its cemiplimab, designed to target cutaneous squamous cell carcinoma, the second most common form of skin cancer. This drop is just one of many that the pharmaceutical company hopes to begin rolling out to stimulate growth.



Other companies to watch closely in the space:



Aurora Cannabis Inc ACBFF ACB which is a producer and distributer of medical marijuana across Canada. The company, formally Prescient Mining Corp, is a Vancouver-based business founded a little over one decade ago. Aurora's main objective is to bring medicine to the people reliably and economically, which sets it aside from many of its major competitors. In the marijuana industry, patients will often have to jump through hoops to procure their medication, but with Aurora's caring and knowledgeable staff, patients no longer have to worry.



Emerald Health Therapeutics Inc EMHTF EMH is another producer and distributer of medical marijuana. Based in British Columbia, Emerald Health is fully licensed by Access to Cannabis for Medical Purposes Regulations (ACMPR) and provides high quality medicine of different varieties. The company's approach to research is what really sets the company apart from the competition.



Cronos Group Inc CRON CRON is another Toronto-based cannabis company with a lot of ambition. The company has prioritized its production acquisitions in order to provide geographically diverse products. Loaded with values, this company is comprised of passionate and focused employees.



One of the primary objectives of Cronos Group is to destigmatize the medical use of marijuana and bring medicine to those who need it. Cronos Group has made it their priority to lead as an example for the industry, and provide the best care possible to the community.



By. Joao Piexe



**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**



FORWARD-LOOKING STATEMENT. Statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense. Forward looking statements in this article include: that the Canadian government will fully legalize and regulate cannabis this year; that the Canadian medical and recreational markets combined will grow substantially; that Cannabis Wheaton Income Corp. ("CBW") can raise funds and partner quickly with producers; that the global cannabis market could expand exponentially; that CBW supply cannabis to markets outside Canada; that CBW can reach EBITDA margins of 50%. Forward looking statements involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is forecasted. Matters that may affect the outcome of these forward looking statements include: that Cannabis may not be legalized on the timeline as expected or at all; that markets may not materialize as expected; that cannabis may not turn out to have as large a market as thought or be as lucrative as thought as a result of competition or other factors; that Cannabis Wheaton may not be as able to diversify or scale up as thought because of potential lack of capital, lack of facilities, regulatory compliance requirements in Canada or outside of Canada or lack of suitable employees, partners or suppliers; partners of CBW may not be granted licenses or additional capacity under existing or newly applied for licenses for them to grow for the cannabis market; that foreign governments may not allow Cannabis Wheaton to operate in their countries; that actual operating performance of the facilities affiliated with Cannabis Wheaton do not meet expectations; that competition quickly develops; costs may be higher than expected and profits therefore lower; and other risks affecting the cannabis industry generally. The Company disclaims any obligation to update such forward-looking statements except as required by applicable securities laws.

PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Oilprice.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively, "we" or the "Company") has been paid by the profiled company or a third party to disseminate this communication. In this case the Company has been paid by Cannabis Wheaton seventy-five thousand US dollars for this article and certain banner ads. This compensation is a major conflict with our ability to be unbiased, more specifically:



This communication is for entertainment purposes only. Never invest purely based on our communication. We have been compensated by Cannabis Wheaton to conduct investor awareness advertising and marketing for [CBW and CBWTF]. Oilprice.com receives financial compensation to promote public companies. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur.

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LEGAL ADVISORY. Investing in companies associated with the cannabis industry may be illegal in the jurisdiction where a reader resides. Before investing in any public company involved in the cannabis industry, potential investors should check with their legal advisor as to whether an investment will breach local or federal law.

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