Two Cannabis Stocks to Consider on H.R. 420 Bill


 
 
07:59 01/18/2019

Controversial or not, marijuana stocks are one of the best investment opportunities.

Analysts at Piper Jaffray say the market for legal cannabis could be worth $15 billion to $50 billion a year, with global sales growing to $250 billion to $500 billion. Analysts at Cowen believe U.S. cannabis sales alone could reach $80 billion by 2030 -- an increase of $5 billion from earlier estimates.

Congress is getting behind legalization, too.

Representative Earl Blumenauer just introduced the bill, which is designed to remove marijuana from under the Controlled Substances Act and allow it to be taxed and regulated like alcohol at the federal level. "Our federal marijuana laws are outdated, out of touch and have negatively impacted countless lives,"

Blumenauer says, as quoted by USA Today. "Congress cannot continue to be out of touch with a movement that a growing majority of Americans support. It's time to end this senseless prohibition."

Here's what it would do if passed:

One, the bill would remove cannabis from the Schedule 1 drugs on the Controlled Substance Act and transfer enforcement authority from the DEA to the (BATFE).

And two, it would also for creation of federal permits for the cultivation, packaging, selling and importing of marijuana.

As H.R. 420 makes its way through Congress, two stocks we like are the following:

Aurora Cannabis Inc. ACB  produces and distributes medical cannabis products. It is vertically integrated and horizontally diversified across various segments of the cannabis value chain, from facility engineering and design to cannabis breeding, genetics research, production, derivatives, high value-add product development, home cultivation, wholesale, and retail distribution.

Aurora could be a standout trade, as the company now anticipates revenue for the quarter ended in December 2018 of between $50 million and $55 million, compared to $11.7 million year over year. That implies growth of nearly 330% in a single year. "Revenue growth for the quarter was driven by the Company's strong position in the adult consumer use market in Canada, continued shipments of medical cannabis to Aurora's expanding base of approximately 71,000 patients in Canada, and relatively stable, supply restricted shipments, to its growing international markets," according to the company.

New Age Beverages Corporation NBEV  engages in the development, marketing, sales, and distribution of beverages. NBEV is another hot marijuana-related stock that's just beginning to break out.

NBEV is one of many stocks that are benefiting from the Farm Bill, and interest in marijuana. In response to the bill's passage, New Age noted that its CBD products, which include a CBD water, a CBD tea, and a CBD shot, are Farm Bill compliant. Even better, the company is prepared to roll out its CBD products nationally.

With growing interest in cannabis and CBD, NBEV is becoming a hot stock to own.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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