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Which Stocks Will Lead The Cannabis Rebound?

Companies / Cannabis Jun 13, 2019 - 08:25 AM GMT

By: Submissions


Since cannabis was legalized for adult use in Canada, the industry has been on a bit of a roller coaster, with most stocks either seeing declines or slight movement upward. Nonetheless, with so much positive press, the cannabis industry is ripe for a rebound.

With a rebound starting to happen, many are wondering which cannabis stocks are going to be the best picks to ride the wave with. As with any industry, there are great companies with compelling arguments for growth, and there are those that are like black holes that devour funds.

GW Pharmaceuticals (GWPH): Cannabis-Derived Treatments Take Center Stage

GW Pharmaceuticals is a biotechnology company with a twist. The company is focused on developing treatments to address some of the rarest and most debilitating diseases in the world. However, it is doing so with the use of cannabis.

In fact, the company is the first treatment developer in the world to receive approval for a cannabis-derived medication in the United States. That medication is known as Epidiolex and is the only FDA approved cannabis-derived medication on the market to date.

Epidiolex is a purified form of cannabidiol that was developed to treat some of the most serious forms of epilepsy. In fact, the treatment has been approved to treat seizures associated with Lennox-Gastaut syndrome or Dravet Syndrome. Both of these are rare, early-onset, drug-resistant epilepsy syndromes.

Moreover, not only has epidiolex been approved by the FDA, the treatment has been rescheduled by the United States DEA to a schedule V. This means that the treatment has a low chance of abuse and addiction, making it more likely to be covered by insurance companies and prescribed by doctors.

However, Epidiolex isn’t the only reason to be excited. The company has a robust pipeline of candidates as well as another approved product. That product, known as Sativex, is indicated for the relief of symptoms in patients with moderate to severe spasticity due to MS and is approved in all countries.

All in all, if you’re looking to invest in cannabis without the volatility associated with adult use regulations, GWPH is a stock that’s comes with incredible potential for growth and could emerge as a leader as the sector continues to recover.

Veritas Farms (VFRM): A Full Spectrum CBD Company With An Eye On Big Box Retail

Since the passing of the 2018 Farm Bill in the United States, CBD has been a hot topic of conversation. After all, the Farm Bill laid the groundwork for the federal legalization of the substance, generally derived from hemp and cannabis.

While most companies in the space are working to get their CBD products into gas stations and head shops, Veritas Farms has a different view. The company is focusing on getting its products into big-box retail stores with smashing success. In fact, the company’s products have been seen in stores like CVS, Bed Bath & Beyond, Kroger, and Rite Aid locations. Chances are that this big box strategy is likely just getting started.

There’s a good reason that big box retailers are interested in what Veritas Farms has to offer. The company offers up full-spectrum CBD products that it has complete control over. After all, the CBD industry is an interesting one at the moment.

Filled with fly-by-night companies with no focus on quality, the industry is looking for a solution that offers quality and value at the same time. Moreover, big box stores want to ensure that there will be no delays down the supply chain. That’s exactly what Veritas Farms offers.

The company owns and operates its own facility where it handles the entire process from seed to sale. This means that the company grows its own hemp, extracts its own CBD, and manufactures and packages its own products. Ultimately, the fact that the company controls every step of the process means that it has full control over quality and can provide products to the big-box stores without supplier-related delays.

All in all, due to the seed-to-sale control over its products, strong entrance in the big-box space, and compelling growth, VFRM is a stock that’s well worth watching!

Zynerba Pharmaceuticals (ZYNE): Another Cannabis-Biotech Company Worth Your Attention

Zynerba Pharmaceuticals, previously known as Zynerba Animal Health, is a company that sees strong value in the use of cannabis in medicine. The company creates treatments for both humans and their furry friends, targeting a wide range of indications.

Recently, Zynerba Pharmaceuticals caught the attention of investors with its cannabis-derived treatment candidates for Fragile X Syndrome, Epilepsy, Autism, and a wide range of other conditions.

Zynerba Pharmaceuticals is aggressively pursuing patent protection early in the cannabis-derived treatment space, making it one to watch. In fact, just days ago, the company announced that it was issued a new patent. The patent (number 10,314,792) covers the treatment of autism spectrum disorder with the administration of a therapeutically effective amount of synthetic cannabidiol. This patent followed another patent that was issued in February, protecting the company’s IP in the use of synthetic or purified cannabidiol for the treatment of Fragile X Syndrome.

It’s worth mentioning that the company is in the process of a Phase 2 trial of Zygel, its topical cannabidiol treatment, as a potential option for autism spectrum disorder. And the company is also in the midst of multiple Phase 2 epilepsy trials as well as a pivotal trial in the Fragile X Syndrome indication.

With multiple ongoing clinical trials, there are several catalysts likely ahead for Zynerba Pharmaceuticals. This, combined with the company’s aggressive expansion of IP protection, makes the stock one to watch as investors start to eye the cannabis sector for opportunities yet again.

First Foods Group (FIFG): Bringing Cannabis Chocolates To Market

First Foods Group is a relatively small company with incredible potential. The company’s claim to fame is its work with chocolates; gourmet chocolates to be exact. At the moment, the company is infusing CBD into chocolates in order to take advantage of the emerging CBD market in the United States. However, that’s not the only thing that makes the stock so exciting.

While First Foods Group is focused on infusing CBD into chocolate, the company is well positioned to take the market by storm once cannabis becomes federally legal for adult use. In fact, the company has already created the formulations and tested their products to infuse THC into chocolates once this takes place.

Unfortunately, as mentioned above, the CBD market is filled with low-quality products that give users little information on exactly what type of and how much CBD is used in the creation of edibles. That’s not the case with First Foods Group.

In fact, the company owns and operates a 6,000+ square foot manufacturing facility. At the facility, First Foods Group uses state of the art technologies in order to produce high quality products with transparency, giving the user the ability to properly dose when using their products.

All in all, with a foot in the door in the United States CBD space, full control over their product manufacturing and a readiness to enter into the cannabis sector once it becomes legal, First Foods Group is one to watch!

Terra Tech (TRTC): A Growing Leader In The United States Cannabis Sector

Finally, we have Terra Tech. The company is focused on every aspect of the cannabis industry and handles the process from seed to sale. Not only does Terra Tech grow its own cannabis, the company extracts both CBD and THC, manufactures products, and ships them out for sale in more than 1,800 stores across the United States.

The company is no spring chicken. In fact, it was incorporated nearly a decade ago. The company’s flagship brand is a medical cannabis brand known as IVXX. However, the company’s cultivation activities operate under the brand name Edible Gardens.

Interestingly, the company not only sells its IVXX brand in various dispensaries, it sells its products in its own dispensaries as well. In fact, Terra Tech runs a chain of dispensaries known as Blum.

Recently, Terra Tech has seen incredible growth in revenues across all sectors of the business. The company is quickly growing to become a leader in the cannabis sector across the country. With continued revenue growth, an expanding footprint, and a strong early leadership role in adult use and medical use cannabis, TRTC is a stock that should be on your watch list.

Final Thoughts

Most investors that follow the space agree; cannabis is ripe for a comeback. The key here is ensuring that, if you’re going to invest, you do your research to find the stocks that are likely to see the strongest gains. In my view, the stocks mentioned above represent some of the strongest opportunities in the space.

The author of this article is not an investment advisor. This article is an advertisement. View all relevant disclosures at CNA Finance.

By Joshua Rodriguez

© 2019 Copyright Joshua Rodriguez - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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