Takeaway: The CBD industry clocked in an amazing $12.3 billion in global sales last year and this year it is going to be $16 billion in global sales. Investors are expecting the CBD stock market to jump big this year. Given the solid sales that this industry offers the stocks opportunity is ripe now more than ever. Canopy Growth (NYSE:CGC), Cronos Group (NASDAQ: CRON), GW Pharmaceuticals (GWPH) and Tilray (TLRY) are four strong contenders that we hope will yield the highest cash hoard. Cash at hand helps organisations plan better and yield better results.
From all indications, the marijuana industry is becoming a tidal wave of immeasurable success for early and long-term investors. Once seen as a forbidden product, the legal marijuana industry churned out a jaw-dropping sum of $12.3 billion from global sales in 2018. Now, in 2019, the industry is on course to generate another masterpiece of sales in the range of 38%, which amounts to $16 billion in cash.
Pot Stocks Call to Duty
As huge money continues to find its way into the cannabis industry, pot stocks must be up and ready to expand their production capacity. They must consider extending their product portfolio, and if possible, buy new assets—all of which need cash. Of course, a good part of these can be realized by selling and getting finance from stocks, but there is no reason to have a nice amount of cash at hand as well. In the marijuana industry, cash means leverage. So, in case you are wondering what makes up the best pot stock with the highest cash at hand to make sure you are investing in the right place, here are four of them for you.
4 Best Pot Stocks with Great Cash
Canopy Growth (NYSE: CGC) – Largest of the Pack
Canopy Growth boasts the largest cannabis stock in the world, with a staggering sum of $3.67 billion in cash and short-term investments. If you are surprised how the company got such money, well; it comes from the $4 billion equity stakes investment by Constellation Brand, the Company that produces Corona and Modelo beer. Constellation Brand has always look for ways to partake in the surging legal marijuana industry.
The $4 billion investment gives Constellation a 37 percent ownership in Canopy Growth, which could move up to 56 percent if all goes well with the deal and the warrants received from it.
As for Canopy Growth, the fund will be used to widen its product portfolio and expand operations into the lucrative US market. The company had already secured a license to produce and process hemp in the state of New York with plans to build a $150 million plant in the state. Already, Canopy Growth announced a $3.4 billion stock-and-cash purchase of Acreage Holdings, an operator of a vertically integrated dispensary, which is compulsory to operate in the US marijuana industry.
Canopy Growth has plans to be very active with its cash loads.
Cronos Group (NASDAQ: CRON) – The Pack Leader in Performance
Second, on this list with a whopping $1.8 billion in cash and asset equivalent is Cronos Group. This company is famous for being the best and most reliable performing cannabis stock of all time, even as we write this article. Despite experiencing some downtrends in the late quarter of 2018, Cronos Group has gone on to record sales of the largest marijuana stock, posting profits of more than 2,700% since it starts operating in the medical marijuana segment for the past few years.
The huge sum of $1.8 billion comes from tobacco giant, Altria, which announced the investment into Cronos Group’s non-diluted 54 percent equity stake last year. For Altria, the investment makes sense as the company has been experiencing a dip in cigarette sales, and it’s looking forward to Cronos to yield new product, hasten growth and bring a good return on its investment.
On the other hand, Cronos Group sees this investment as a desperate and God-sent opportunity to increase and fast-track production capacity. With just an annual production range of 120, 000, Cronos is far behind the competition, and it needs to increase its distribution to places outside Canada.
So, from all indications, Cronos will most likely put this fund into use, meaning you stand a better chance of investing in such promising and lucrative venture as long as the company maintains its high market ratings.
GW Pharmaceuticals (GWPH) – A Market leader In Its Own Right
Armed with $592 million in cash at hand, GW Pharmaceuticals listed as NASDAQ GWPH is a company that doesn’t grow marijuana but produces drugs from it. GWPH is one of the few companies to have developed and received approval for the sale and distribution of a cannabis-derived drug known as Epidiolex.
Not every time you find a natural solution that helps to combat epilepsy in children. GWPH put a lot of their resources on research about the positive aspects of cannabis, and it wasn’t much of a surprise when in June 2018, the FDA gave it the green light to start mass-producing and distributing the cannabidiol-based natural drug, Epidiolex, after it was successfully tested three times. The drug was found to be effective in reducing childhood-epileptic seizure frequency by 30 percent to 40 percent.
Last year November saw the launch of Epidiolex selling for $32,500 as an annual price list. While it has no FDA-recognized competitor in one of its area of approval, GWPH still has to deal with marketing and launching expenses. So, it is crucial that it has some cash at hand to cover or offset related losses. It also needs to fund ongoing research efforts that seek to expand its drug label and advance its position in the marijuana industry sales list.
Tilray (TLRY) – The Most Interesting & Controversial of the pack
Tilray’s entrance into the stock market was one that comes with interest and controversy at the same time. After just a month of its IPO, Tilray stock produces a remarkable hit. However, the glory was but for just a moment, and TLRY came crashing down like a helpless elephant.
While some commentators and analysts have described Tilray as an unsustainable bubble, it is essential to note that the company’s stock since its IPO has maintained more than 470%, which you cannot dismiss or classify as a failure or outright success. Notwithstanding, shares have since stabilized since and the company has been able to build its cash holding to an impressive amount of $518 million.
The new cash holding is designed by the company to shift its attention from the Canadian market with a focus on moving to new markets in the US and Europe. That will expand the production capacity of the company and increase its profit base. No doubt, with the company forecasted to lose money in 2019 down to 2020, this cash hoard will come handy.
The health benefits of marijuana are no longer in doubt. However, it is good that one understand the cash hoard available to these companies. Cash at hand helps the company to expand their portfolios and run expenses more conveniently. From there onward, you can decide if such a company is worth the investment. There you have your best pot stocks with the highest cash hoard. Stay well folks and invest wisely.