CBD, short for cannabidiol, was only legalized a few years ago. However, the substance has shown massive growth, particularly as more and more evidence reveals that the compound may have a variety of medical benefits to consumers. According to recent surveys, 1 in 3 American adults has actually tried cannabis.
This has made the substance more profitable, and more businesses are beginning to invest in the area. As noted by the financial pros at Money Morning, “The opportunity to be an early investor in a young and booming industry is sure to appeal to any savvy investor. Of course, picking the best cannabis stocks is crucial to making money in this sector.”
As such, here’s a look at the top CBD stocks to buy.
It may seem strange to have a pharmaceutical company in an article on CBD, but GW Pharmaceuticals is an excellent, CBD-related stock pick. Why? At the moment, they sell the only FDA- approved CBD-based medicine: Epidiolex, which is approved by the FDA to treat certain types of rare seizure disorders in children. This, quite literally, gives GW Pharmaceuticals a monopoly on the CBD-prescription market, although that is likely to change in the future. However, this drug’s legal status puts GW Pharmaceuticals at the cutting edge of legal cannabis medicine, and it positions them excellently for future success, as the drug’s use continues to grow and more drugs may come in the future. Furthermore, from a financial position, the company is in excellent shape, showing growing profit margins.
Apharia is on this list for a few reasons. First, it is a very diverse company within the cannabis industry. It owns multiple brands, including medicinal and recreational lines. This allows it to operate in the many states that have legalized recreational or medicinal cannabis. Its stock price is on the affordable end, usually around $11.60, thus leaving room for newer stock investors to invest in it. It is also starting to see more and more institutional investment meaning that larger financial institutions see its potential for profit growth.
No list of CBD stocks would be complete without examining its support-related industries. GrowGeneration is an expert in this area, as they produce equipment necessary for the growth and harvesting of cannabis and CBD. Their expertise and experience make them a highly profitable and popular company, having generated $79 million in revenue in 2019. Furthermore, unlike most cannabis stocks, they offer a small dividend of $.02 a share. This is a nice added bonus for investors. They have also shown massive growth over the past year, starting at $4.52 a share and now hovering around $51 a share, putting them in the upper echelon of growth as far as cannabis-related stocks are concerned.
As their legal status continues to evolve and their growth potential becomes more apparent, it is clear that CBD stocks, as a whole, have nowhere to go but up. As such, they may make an excellent and diverse addition to your portfolio.