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If I had a dollar for every college student with a Bob Marley poster on his wall, I’d have a lot of dollars. It makes sense then that the name of the reggae master and frequent ganja smoker would eventually work its way into the world of marijuana stocks.
Certainly that’s the logic behind Bob Marley-branded marijuana and the startup that produces it, which recently raised $75 million – the largest fundraising round ever by a marijuana company.
Privateer Holdings, a Seattle-based company that is growing its portfolio of marijuana brands, including “Marley Natural,” is just one of several companies that plan to grow with the budding legal marijuana industry.
Privateer Holdings has secured as much as $82 million in funding, including money from Founders Fund, the venture capital fund created by PayPal co-founder Peter Thiel. Rapper Snoop Dogg, an unabashed weed aficionado, also invested in this latest round of funding.
Privateer generated $11 million in revenue last year. It expects to generate $111 million in 2015 and $440 million in 2016, while reaching profitability sometime next year.
Today, April 20, marks a popular marijuana holiday. While there is some debate over the origins of “4/20,” there is little debate that it is a popular marijuana holiday. So it makes sense to take a look at the landscape of marijuana stocks.
Marijuana stocks were hot this time last year. But many of them have fallen dramatically since that time. It seems that after legalization of recreational marijuana in Colorado at the start of 2014, many marijuana stocks got caught up in a bubble.
Generally speaking, things seem to have settled down over the past few months and many of these stocks are on the rise again.
Marley Natural is just one of the brands owned by Privateer Holdings. And Privateer Holdings is just one of the companies involved in the marijuana space. Though Privateer isn’t yet a publicly traded company, several companies in the industry trade publicly as marijuana stocks.
So, in honor of 4/20, I’ve put together the following overview of several marijuana stocks:
GW Pharmaceuticals (NASDAQ: GWPH)
GW Pharmaceuticals is by far the largest and most legitimate marijuana stock. This has something to do with the fact that it is only barely a marijuana stock – the $2.22 billion company is really a pharmaceutical stock.
That said, the company is developing a suite of medicines derived from marijuana plants to be used in pain treatment, multiple sclerosis and epilepsy. The stock is up nearly 150% in the past year.
Insys Therapeutics (NASDAQ: INSY)
For Insys Therapeutics, marijuana-based products are also just one small piece of the pie. Like Oxis, described below, Insys is focused on synthetic Cannabidiol (CBD), rather than natural CBD.
The stock is up 56% over the past year.
The Penny Stocks
There are dozens of penny stocks in the marijuana space, some more legitimate than others. There are undoubtedly gems in this group, though you should know that this is an incredibly high-risk space – pun intended. Here are a few:
Surna (OTC: SRNA)
Surna is a Colorado-based company focused on the backbone of the legal marijuana industry. The company produces energy efficiency and climate control systems for large-scale marijuana growers. It owns seed-to-sale software used by marijuana growers and dispensaries, and is investing in new technology to be used by the industry. I have visited their headquarters and personally own shares of this company.
The stock is down nearly 98% in the past year.
Medical Marijuana Inc. (OTC: MJNA)
Medical Marijuana Inc. operates a small portfolio of brands and marijuana logistics businesses. The stock is down 58% over the past year.
OXIS International (OTC: OXIS) is a pharmaceutical/nutraceutical company researching several marijuana-derived products. The stock is actually up nearly 400% over the past year, but it’s still tiny, with a market capitalization under $20 million.
Cara Therapeutics (NASDAQ: CARA) is a $270 million marijuana biotech company. Like others in its space, the stock lacks meaningful trading volume and is down over the past year, though only around 11%.
Cannabis Science (OTC: CBIS), another marijuana pharmaceuticals company, is down 68% over the past year.
Cannabics Pharmaceuticals (OTC: CNBX) is a rarity in this group, as the stock is actually up 30% over the past year.
As I mentioned above, there are dozens of penny stocks in the marijuana stocks space. Most are junk, some are gems. GW Pharmaceuticals has a good track record and a lot of investor confidence. Few others in the space trade out of the dreaded “penny stock” realm.
But if you’re willing to dig in and take a risk, there are certainly speculative opportunities to be found in the marijuana industry.
DISCLOSURE: I personally own shares of Surna.
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