At the turn of the year, California officially became the most significant adult-use recreational cannabis market around, leaving pot stock investors salivating. Though some bumps have occurred along the way, especially some regulatory hurdles, the move to repeal prohibition has mostly been a success.
The market has created a massive rush for industry insiders and weed stock investors alike, and wading through the voluminous list of companies to find the right pick can be daunting. Here are the three best California weed stocks for smart investors:
A permanent fixture on the West Coast, Canadian royalty company CannaRoyalty Corp. (CSE:CRZ) is a solid pot stock play with diversified investments in royalty agreements, licensing deals, strategic partnerships, and a variety of equity stakes. Company CEO Marc Lustig said of California that “[it] is and will continue to be the most important cannabis market in the world.”
In fact, CannaRoyalty has gone all in on the West Coast, with nine different assets in the state, including their recent acquisitions of Bhang Vape and Alta Supplies. Bhang is one of the country’s leading vape cartridge manufacturers, while Alta Supply is a licensed distribution company headquartered in California. Other California assets include River (RVR), a complete stake in marijuana vape pen manufacturer GreenRockBotanical, and their 100 percent ownership of Soul Sugar Kitchen edibles.
When asked recently about the company’s focus on California, Lustig was blunt in his assessment of the cannabis landscape. “California as a medical market in 2017 did roughly [U.S.]$3 billion in legal revenues. To put that in perspective, for the Canadian market the which was medical all of 2017 and still is in 2018 the revenues may have been [CAD]$250 - $300 million,” said Lustig in an interview earlier this year.
He continued, “The California market is 10 to 15 times bigger than the Canadian market yet the investment value of a number of the public companies in Canada would suggest that Canada is bigger. But it's a fraction of the size of the California market. That obviously explains why we're so focused on the California market.”
Cannabis stocks in California are set to explode in the coming year, as the state reforms and tightens its regulatory framework. CannaRoyalty is at the forefront of that movement, making them a stable marijuana stocks play for any investor.
Terra Tech Corp.
Recently released financials for the 2017 fiscal year show Terra Tech Corporation’s (TRTC) (TRTCD) aggressive expansion plans to be paying off only three months into California’s legalization experiment. According to a statement, revenues for 2017 hit just over $35 million, representing an increase of 41 percent over the prior year. If that were not enough for pot stock investors, their last quarter saw revenues of approximately $11 million. That number represented an increase of 54 percent from the previous year.
Terra Tech runs multiple subsidiaries, including Blüm, a retail dispensary for medical cannabis products and IVXX Inc., a producer of cannabis extracts for the medical cannabis market. With locations in Nevada and other holdings in New Jersey, the company has the bulk of their properties located in California -- enough so to entice the weed stocks crowd into investing.
“In California, we currently have dispensary operations in Oakland and Santa Ana, and are continuing to build out another dispensary in San Leandro as well as cultivation and extraction facilities in the state,” said Terra Tech CEO Derek Peterson in a recent statement. “We are encouraged by our progress establishing recognizable brands, a loyal customer base and developing extensive cultivation capabilities, which we expect to allow for the production of up to 20,000 pounds of cannabis per year, when complete.”
He went on to say that, “as the U.S.'s largest state by population, California represents a major market for us.”
Trading at over $3.00 per share, and with a market cap over $200 million, Terra Tech is a California cannabis stock worth watching in the near term.
Also Worth Watching
Canadian company Sunniva Inc. (OTC:SNNVF) is a relatively new play in the weed stocks market, having only begun trading publicly earlier this year. Splitting their time on both sides of the border, the company is attempting to open facilities in both British Columbia and Cathedral City California. With plans to put out 60 million grams per year, marijuana stock investors may want to keep tabs on the future of this pot stock play.
Based out of California, the parent company of wholly owned subsidiaries Solis Tek Digital Lighting and Zelda Horticulture, Solis Tek (SLTK) is an attractive bet in West Coast weed stocks. The company recently teamed up with Medicine Man Technologies, announcing a deal to become their recommended supplier of High Intensity Discharge lighting technologies for all consulting and sales relationships. It is a promising deal in a market full of promising deals, but one that sees this under-the-radar pot stock coming out on top.