Who is Leading the Cannabis Industry?

The cannabis industry is booming, and many companies are leading the way. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions achieve financial freedom through their website, podcasts, books, newspaper columns, radio programs and premium investment services. Green Thumb Industries ranks as one of the largest in the U. S., owning 77 retail cannabis stores in 15 states.

They also have enough additional licenses to nearly double their number of stores. Cresco Labs, headquartered in Illinois, operates retail cannabis stores in 10 states, including six of the most populous. They are the leading wholesaler of branded cannabis products in the U. S., and their shares can only be traded on the US OTC markets.

Medical cannabis is likely to be a big winner if the Biden administration goes ahead with federal marijuana reforms that allow U. S. stock exchanges to list the shares of cannabis companies operating in the country. Since marijuana is still illegal at the federal level, cannabis companies cannot easily obtain capital from banks or financial institutions.

Innovative Industrial Properties (IIP) helps solve this cash shortage by buying U. S.-owned properties and re-leasing them to medical cannabis operators. This provides the cannabis operator with much needed money, and leasing agreements create a consistent revenue stream for IIP. IIP has grown significantly in recent years and now owns properties in 19 states.

ScottSmiracle-Gro faces similar market dynamics as GrowGeneration. Like GrowGeneration, its shares can be traded on a major stock exchange (in this case, the New York Stock Exchange), since Scotts doesn't violate any federal marijuana laws. The COVID-19 pandemic affected almost every sector of the world economy, including the cannabis industry. States and dispensaries were designated as essential businesses, leading to a surge in sales during the first few months of the coronavirus outbreak due to more time spent at home and increased anxiety.

Marijuana producers and retailers benefited, as did ancillary suppliers who sold garden supplies and other products to these companies. According to Gallup, 49% of U. adults say they have tried marijuana at some point in their lives - up from 40% just 7 years ago - as legalization continues to spread across the country. The National Institute on Drug Abuse shows lower numbers compared to Gallup in its most recent survey (22.1% of young people aged 18 to 25 say they have used marijuana in the past month).

Women are rapidly becoming the largest demographic group of cannabis users, with edibles and concentrates gaining popularity as markets mature and consumers learn more about cannabis products. Cannabis buyers continue to enjoy e-commerce options created by the pandemic, and states are learning to accelerate processes and are eager to start legal sales of cannabis. According to Marijuana Business Daily, California took 7,308 days from drugs to recreational drugs in the state's first sale. Analysts predict that every year the cannabis industry is worth more than expected - although some states are starting to see sales fall year after year - and 57% of cannabis consumers believe that everyone should have access to opportunities in this sector.

Vangst surveyed cannabis companies and professionals and found that 34.4% of employees have less than a year of experience in this sector while 30.6% have more than five years of experience.

Diana Price
Diana Price

Proud pop culture nerd. Extreme coffee maven. Amateur travel ninja. Proud food nerd. Infuriatingly humble pop culture nerd.