2 Best Publicly Traded Weed-Producing Companies in the U.S. for 2…

Marijuana-Producing Companies for 2018

While 2018 has shaped up to be anything but kind to the marijuana industry, marijuana-producing companies still continue to see massive investor investment. Why? Simple: upside. There’s still a tremendous amount of upside in marijuana cultivation stocks and other companies operating in this space. While the largest weed producers in the U.S. are not publicly traded for a number of reasons (which I’ll elaborate on below), that doesn’t mean that marijuana producer stocks in the U.S. are not worth looking at.

In this piece, we’ll take a look at the best publicly traded marijuana companies, but before we do that, allow me to explain why marijuana-producing companies that are publicly traded are not U.S.-based.

The Best Publicly Traded Marijuana Companies Are Canadian

That headline, actually, is a little misleading; the only publicly traded marijuana companies are Canadian.

That’s because while the U.S. has its fair share of marijuana-producing companies, they are not publicly traded.

There are many reasons why this is the case, but chief among them is the confusion that still exists in the U.S. regarding cannabis.

While select states have legalized medical marijuana, recreational marijuana, and sometimes both, the drug still remains illegal under federal law.

As such, it is illegal to transport marijuana or cannabis across state lines. So producers are therefore legally bound to produce all the cannabis they sell in-state. As you can imagine, such a massive curtailing of the potential market has limited these companies’ expansion prospects.

Canada, however, faces no such barriers. In fact, the current federal government ran partly on a platform based on the total legalization of marijuana across the entire country for both medical and recreational use.

This has garnered Canada a reputation as a weed-friendly country, and since the current government assumed power with a mandate to legalize the drug, we’ve seen an explosion in both the number of companies and the value of Canadian marijuana stocks.

So for now, Canada is the home of marijuana-producing companies that are legally traded. While California, which is both larger and richer than Canada, has legalized marijuana, U.S. investors looking to get into the market will have to turn their eyes north.

That brings us to the best marijuana cultivator stocks.

Weed-Producing Companies List

Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED) is the largest company in the marijuana industry by market cap and is usually seen as the industry leader in a number of metrics.

It just announced a three-year supply deal with Quebec that will see the company sell 12,000 kilograms to the province. Canopy Growth stock has soared by 10% this week as a result of the news. (Source: “Canopy Growth completes three year supply agreement with the Société des alcools du Québec,” Cision, April 11, 2018.)

Most importantly for our purposes here, it represents a Canadian marijuana stock that is both a marijuana-producing company and a very good option for U.S. investors, especially those who are hoping to make inroads on the marijuana market in the U.S. as it slowly opens up.

Chart courtesy of StockCharts.com

Consider that major U.S. companies have shown serious interest in Canopy Growth stock.

Constellation Brands, Inc. (NYSE:STZ) completed a blockbuster deal with Canopy that helped kicked off the massive run we saw Canopy Growth stock undergo to close out 2017.

Constellation put in about $191.0 million for a 9.9% stake in the marijuana company. (Source: “Alcohol Industry Targets Pot With Constellation-Canopy Deal,” Bloomberg, October 30, 2017.)

The seller of “Corona” beer thought it is best to join the potential competition and has since mentioned that the two are partnered in finding ways to cross-promote products.

Another big reason why U.S. investors ought to have Canopy Growth stock on their radar is that the company has stated that it’s looking to get a listing on a major U.S. stock exchange.

This is big news as the vast majority of marijuana companies either trade over-the-counter (OTC) or on Canadian exchanges. Being on the Nasdaq, for instance, would be a huge boon to the company and once again signals its intentions to become more internationally focused.

Speaking of the Nasdaq, there is currently only one pure-play weed company on that exchange: Cronos Group Inc (NASDAQ:CRON).

The company joined the exchange in 2018 and was immediately flooded with interest and capital.

Just look at the trading volume below in March and you can see a massive spike in the number of trades and the stock value when CRON stock went live on the Nasdaq.

Chart courtesy of StockCharts.com

Now, this makes it one of the best marijuana-producing companies for U.S. investors concerned with Canadian tickers or OTC markets, but I’ve had my doubts about the long-term value of CRON stock versus Canopy Growth stock, for instance.

Still, there’s a lot to like about the potential of CRON stock.

And as for its interest in the U.S., the company made a deal with MedMen Enterprises.—otherwise known as MM Enterprises USA, LLC—one of the largest American suppliers of marijuana.

While the deal primarily focuses on getting MedMen into Canadian markets ahead of legalization, the companies have said that they are looking into expanding Cronos’s presence in the U.S. as well.

CRON stock, to me, is more volatile than Canopy Growth, but that doesn’t mean it has no upside. It’s riskier, sure, but also likely to have bigger payoffs.

Not to mention that the company is one of the most American-friendly marijuana investments available.

The stock has had a rocky run in 2018 (like many other marijuana companies this year) but its value shot up by 15% this week alone after the company dropped significant value since its entrance onto the Nasdaq.

Analyst Take

For U.S. investors interested in marijuana-producing companies, unfortunately, they’re largely shackled to Canadian companies that are traded on Canadian tickers.

That’s simply the nature of the beast at the moment. But despite them being Canadian companies operating on lesser-known exchanges, these are still great companies that have amassed a huge amount of gains over the past few years.

This year has been a difficult one for the marijuana market so far, but that doesn’t mean there isn’t value to be had, and that extends to U.S. investors as well.