Marijuana producers take the most pure-play way to invest in pot stocks. These companies cultivate marijuana, produce cannabis products, and distribute the products to customers.
Ancillary products and service providers don’t grow cannabis themselves. Instead, these companies supply the products and services needed for marijuana growers. As well as others in the cannabis industry to conduct their business successfully from all angles.
Watching The Right Pot Stocks
One-pot stock to watch Constellation Brands Inc. (STZ Stock Report) is one of the biggest beer companies in the United States. With its best-selling brands Corona and Modelo. Overall, although the beer industry is not developing as fast, Constellation has achieved industry-leading growth with its high-end and craft beer. However, since Constellation Brands holds a 38% stake in Canada’s largest cannabis producer, Canopy Growth Corporation, which is another promising pot stock to watch.
Constellation has made a multi-billion dollar bet on Canopy Growth because it believes that marijuana is “a disruptive market transition for a century” and that Canopy Growth is the world’s best cannabis supplier. The company is one of the beverage manufacturers that are being attracted to launch a new beverage category.
In addition, beverage companies have been concerned that the legalization of marijuana may have a negative impact on the sale of alcoholic beverages. By participating in the cannabis industry, Constellation hopes to compensate for the loss of consumer demand from alcoholic beverages to cannabis beverages.
Innovation and Progress In The Market
Another marijuana stock to watch Origin House (ORHOF Stock Report) is the largest distributor of California cannabis products. The company distributes more than 50 brands to approximately 70% of pharmacies in the state. The California market offers tremendous growth opportunities for Origin House. The legal casual cannabis market in California began operations in 2018. By 2022, the state’s annual cannabis sales should more than double, reaching $7.7 billion, accounting for almost a quarter of global cannabis sales. Origin House is ready to make a profit by distributing many of the best-selling brands.
The company has several of these brands. CEO Marc Lustig said that Origin House currently accounts for about 70% of total distribution revenue, with nearly 30% of its revenue coming from private label sales. As the company acquires more brands, this combination may shift to a 50/50 ratio.
Although its core business is in California, Origin House is headquartered in Canada. The company hopes that its home country will also see growth. In September 2018, Origin House acquired 180 Smoke, Canada’s leading gasifier retailer, which has a reliable online retail business in 26 retail locations.
Due to the high flexibility risks in pot stocks, investing in cannabis stocks is best after proper due diligence has been done. Every investor new or seasoned should be aware of the risks and be cautious when investing in pot stocks.