Despite recent volatility in the marijuana markets, pot stocks remain bullish as legalization efforts continue to push boundaries and public perception trends towards prohibition repeal. Still, new pot stock investors eager to jump into the market may not know where to start. With nearly 80 companies in Canada and huge swaths more popping up in the states, a crowded field can feel overwhelming to seasoned Wall Street players.
Finding the balance between riskier targets in the market and safe places to store money for long-term growth is a fine line to walk in an ever-changing weed stocks sector. Here are the top three pot stocks to broaden your portfolio:
Innovative Industrial Properties, Inc.
Late last year Maryland-based Innovative Industrial Properties, Inc. (NYSE:IIPR) announced the purchase of 358,000 square feet of greenhouse and industrial space in Arizona, along with a deal with a subsidiary of The Pharm, one of the largest wholesalers of medical grade cannabis in Arizona, to manage the property. An under-the-radar deal, it highlights the creative nature of the cannabis industry and the potential the pot stock investors have in the sector outside the typical cultivation company.
Innovative Industrial Properties provides real estate capital solutions and manages free-standing properties for growing licensed medical-use cannabis. However, the facilities themselves are maintained by state-licensed growers. To date, the company counts properties in New York, Maryland, and Minnesota, along with the aforementioned Arizona space among its holdings.
Experts report that earning expect to be $0.19 for last year and $1.32 this year. More importantly, shares are up an impressive 44 percent since last January. First-time or seasoned marijuana stocks investors may find this pot stock play safe enough to bet on, yet risky enough to turn heads.
Currently, the company trades at $26.51 per share.
Though not a pure cannabis stock, AbbVie Inc. (NYSE:ABBV) holds a leg up in the legal weed industry over much of their competition. A large cap US biopharmaceutical company, AbbVie holds the first cannabis-based drug with approval from the Food and Drug Administration. Marinol is FDA approved for chemotherapy-induced nausea and vomiting, and anorexia. It also helps AIDS patients to gain back their appetite.
While the company does not report on sales of the drug, which may give some new pot stock investors pause, the recent spread of legalization can only be a net positive for the company. As medical-grade marijuana continues to gain widespread acceptance, holding the country’s only approved drug, albeit a synthetic cannabinoid, is nothing at which to shirk.
According to the experts, AbbVie should grow their earnings by a whopping 33 percent throughout this year, even with a price-to-earnings ratio of 15.8.
The company currently trades at $112.03 per share.
Cronos Group Inc.
The darling of cannabis stocks investors everywhere right now, Cronos Group Inc. (NASDAQ:CRON) (TSX-V:CRON) garnered a slew of positive headlines recently when they became the first Canadian weed stock to list on the Nasdaq exchange. A diversified company with global holdings, Cronos operates two wholly-owned Canadian Licensed Producers regulated under Health Canada's Access to Cannabis for Medical Purposes Regulations, Peace Naturals Project Inc., and Original BC Ltd.
Moreover, Cronos recently announced a deal with Los Angeles based MedMen, one of the largest retailers of legal cannabis in the U.S. Together they created MedMen Canada Inc., a joint partnership split evenly down the middle that will bring the MedMen brand into Canada via new products and retail stores.
The deal had marijuana stock investors giddy, shooting up the stock nearly 12 percent on the announcement. It shows how Cronos can leverage positive press like their Nasdaq uplisting, and turn it into profits for their shareholders.
Cronos currently trades at $8.75 per share.