What a difference a few years makes. Go back a little more than a decade, and the phrase “legal cannabis” was basically a non sequitur. Go back five years, and while the phrase “legal cannabis” had entered our general lexicon, the businesses which were producing their medicinal crops were considered corporate pariahs.
Today, however, the landscape has changed completely with respect to the companies which have entered this emerging sector. Financing is now readily available for these enterprises, and investors are now lining up to jump into the latest market darlings in this niche.
Names like iAnthus Capital Holdings (
CSE: IAN,
OTCQB: ITHUF,
Forum), Veritas Pharma Inc (
CSE: VRT,
OTCQB: VRTHF,
Forum), Namaste Technologies Inc (
CSE: N,
OTCQB: NXTTF,
Forum), Tinley Beverage Company (
CSE: TNY,
OTCQB: QRSRF,
Forum), and others are rapidly developing large investor followings, as return-hungry investors are seeing a lot of blue sky potential in the legal cannabis space. While the sector was born on the rapidly growing demand for medicinal cannabis products, this appears to be just the first baby steps for this emerging market.
Full legalization of cannabis is no longer just the talk of a handful of advocates, operating on the fringe of society. Cannabis legalization is now a reality in the
state of Colorado, with legalization movements growing at the federal level, as well as the state/provincial level, in both the
United States and
Canada.
While the acceptability of cannabis at both the social and legal level is rapidly increasing, parallel to this is the rapid growth of legal cannabis products. Naturally, these products begin with cannabis in its raw form, but that is just the starting point. More concentrated extracts have been created, in order to provide greater relief to medicinal users. There are also a wide range of edible cannabis products available for consumers. However, now these edible products go beyond mere food items to include cannabis beverages, as well.
Along with this comes the assorted accessories and supplies necessary to consume these cannabis products. From low-tech pipes to more sophisticated vaporizers, cannabis users (whether medicinal or recreational) can now ingest the active ingredient from the marijuana plant without having to absorb the harmful effects from smoking cannabis.
With a growing market comes growing market caps. The companies mentioned above have current market caps in the range of $5 - $20 million. In contrast, industry leader Aurora Cannabis (TSX: V.ACB) is a relative giant, with current market capitalization in excess of $300 million. That translates into enormous upside potential for the newer entrants into this market.
Growing investor appeal. Growing acceptance from financial institutions. Growing social and legal acceptance in our societies. A growth market. When it comes to the legal cannabis sector, “growth” is the operative word.
Legal pot? While the debate will continue regarding this social/legal evolution, it is now clear that legal cannabis is here to stay – not just in the realm of medicine, but as a new product for general, adult consumption, and as a new investment product for investors looking for the latest “hot sector.”
FULL DISCLOSURE: iAnthus Capital Holdings, Veritas Pharma Inc, Namaste Technologies Inc, and Tinley Beverage Company are paid clients of Stockhouse Publishing.