5 Pot Stocks to Watch into the Election

In less than a couple months we’ll know whether Hillary Clinton or Donald Trump will be elected as the next U.S. President. Regardless of who wins, they’re going to have a laundry list of problems. Now, you haven’t heard much about this during the debates, but cannabis’ placement as a Schedule I drug is hurting many hard working people across the nation.

With the polls too close to call, both candidates have come out swinging. Hillary Clinton has really been going after healthcare and pharmaceutical companies for the rampant price gouging in medications. Is she just talking tough to try to win votes or does she really want to make a change? One thing for sure, the fear of rising healthcare costs is a major concern amongst voters. With that said, it’s not a surprise to see the demand for alternative and safer medication on the rise.

Hillary Clinton expressed support for the legalization of medical marijuana and promotes the research into the medical benefits of marijuana.

On the other hand, Donald Trump is looking to get rid of Obamacare, but really hasn’t laid out a solid plan to the public. So there’s a lot of uncertainty in the healthcare space heading into the election. Trump also supports legal access to medical marijuana and believes states should be able to set their own policies on adult recreational use of marijuana.

This makes the potential growth in marijuana attractive since there is a high potential for growth as more and more states move to legalize pot for medicinal use.

Cannabis Market

Either way, we’ll have to wait some time before seeing policies change. However, there are some short-term investment opportunities that arise heading into the election. According to New Frontier and ArcView Market Research, “the U.S. legal pot market is expected to grow to $7.1 billion in 2016” [1]. The U.S. legal sales of cannabis was just $4.6 billion in 2014, and they jumped to $5.7 billion in 2015. By 2020, U.S. legal sales of pot are expected to grow to $22 billion, over a 25% compound annual growth rate (CAGR) between 2014 and 2020.

Top Five Cannabis Stocks to Watch

Any news or statements made by Hillary Clinton or Donald Trump in favor of a policy change for the legal medical marijuana use or adult recreational use should send some pot stocks higher. Heading into the U.S. Presidential election, you may want to keep an eye out on these top five pot stocks, in no particular order.

Cannabis Stocks to Watch

1. Cannabis Sativa Incorporated (CBDS)

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Cannabis Sativa Inc. (OTCQB: CBDS) is one pot stock that short-term investors may want to keep on the radar. Cannabis Sativa operates through its subsidiaries to develop, manufacture and sell herbal-based skin care products throughout the U.S. and across the globe.

“The company offers various herbal based line products, such as Go Deep, Go Deep EXTRA, Face Garden, Body Garden and Lip Garden.” [2] Go Deep and Go Deep EXTRA are deep penetrating ointments. Go Deep is a healing salve that reduces pain and inflammation, which is great for those who have muscle, ligament, tendon and joint points. Go Deep EXTRA is primarily used to reduce migraine and sinus headaches. Face Garden is an antioxidant and moisturizing cream cream for the face.

In addition to producing and selling herbal based products, Cannabis Sativa also engages in R&D, and licensing of various natural cannabis products ranging from edibles, recipes, topicals and strains.

Cannabis Sativa is still in its growth stages, but has reduced its total liabilities significantly, while increasing its stockholders equity between December 31, 2013 to December 31, 2015. For the period ending on December 31, 2013, CBDS had total liabilities of $32.53 million and total stockholder equity of -$32.50 million. For the 2014 fiscal year, CBDS reduced its total liabilities to just $3.96 million. Although it had negative equity, it improved significantly year over year (YoY).

Thereafter, during the 2015 fiscal year, Cannabis Sativa turned its negative total stockholder equity positive and reduced its total liabilities significantly. It reported total liabilities of just $372,716 and total shareholder equity of $2.88 million for the fiscal year end on December 31, 2015.

With the ongoing research and the need for pain relief for chronic muscle, joint, tendon, migraine and headache treatments, Cannabis Sativa could rise in the short term, if Hillary Clinton keeps a strong lead in the polls heading into the election. As the nation moves towards the legalization of medicinal marijuana, Cannabis Sativa is poised to continue strengthening its balance sheet and generate positive net income. One would think in a friendlier business environment it could even thrive.

2. Grow Condos Incorporated (GRWC)

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Grow Condos Inc. (OTCQB: GRWC) is the world’s first publicly-traded real estate company that is exclusively dedicated to the Cannabis industry. The company operates as a real estate developer, acquirer and manager of U.S. industrial properties, providing condo style, turn-key cannabis growing facilities. Additionally, Grow Condos develops, leases and owns investment sales opportunities of cannabis production industrial properties.

The legal and recreational market is expected to grow to $37 billion within five years and $50 billion within the next 10 years, if it is legalized federally. Moreover, the cannabis-based therapeutic applications is expected to exceed $50 billion over the long term. Grow Condos is expected to generate strong revenues and net income as the move towards legalization of medicinal marijuana gains traction.

Currently, the company owns and operates 10 unit facilities based in Medford, Oregon. There’s a long waiting list and the facilities are already fully rented out. The company’s revenue streams will come from real estate, education and advisory, and ancillary services. Grow Condos closed its second facility in Eugene, Oregon, and it’s beginning to implement the second phase of its business model. The Eugene, Oregon facility needs a larger development of 5 buildings with 37 units. Each of the empty units is expected to be sold for approximately $150,000 to $175,000 per empty shell, but the company expects that typical spends could reach up to $400,000.

Grow Condos CEO Wayne Zallen stated, “We are very pleased to be able to expand in this advantageous segment of the industry. This new property will give us a great opportunity to offer tailored space for production and processing in a market ripe with growers aggressively seeking suitable solutions.”

The company partnered with CAN LEASE LLC for its turn-key leasing, which provides another potential revenue stream for Grow Condos.

Grow Condos CEO said, “CAN LEASE can be a great opportunity for the company in that one of the biggest challenges for growers is how to find a reliable source of expansion capital when it’s required. This relationship allows the company to provide a solution for our customers and participate in an additional source of income in providing a one stop solution for them.” [4]

The real estate market is still recovering and booming after the 2007-2009 financial crisis, which makes Grow Condos a unique short-term investment to watch into the November election. As of October 10, 2016, GRWC closed at $1.22 per share, and it’s about 50% off its 52-week high. Therefore, short-term traders and investors should consider an investment in GRWC because its growth is promising.

3. GreenGro Technologies Incorporated (GRNH)

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GreenGro Technologies Incorporated (OTCQB: GRNH) markets, manufactures and designs green eco-friendly vertical cultivation systems in the U.S. The company offers various products and services to consumers and industrial cultivators of agriculture. The company’s products and

services are targeted at consumers and industrial farming operations.

GreenGro’s Vertical Cultivation and Gardening Systems have patent pending

designs and manufacturing facilities, which was recently acquired through the purchase of the company Vertical Hydrogarden. The system reduces the physical footprint of cultivating, while reducing energy costs and improving crop yields.

Through GreenGro’s revolutionary technology it is well-positioned to capture the legal cannabis growth in the industry. On September 23, 2016, “GreenGro Tech announced its Greengro 3-tier Franchies Model for controlled environment agriculture business.” [5]

The company’s subsidiaries, Vertical Hydrogarden and BP Gardens Inc., a controlled environment agriculture company specializing in leading technologies and production methods of agricultural products, market the company’s 3-Tier Franchise Model.

The first-tier of the company’s subsidiaries is BP Gardens Glass Greenhouse Franchise, which offers a turn-key two acre facility designed to produce up to nine million heads of lettuce annually. Cannabis Ventures Inc. Glass Greenhouse Franchise and Cannabis Sector is the company’s second tier. The glass greenhouses are set up for the cultivation of medical marijuana, which should increase the company’s revenue and earnings growth significantly over the long term. The company’s third tier is the franchising of Vertical Hydrogarden stores, which is a retailer of year-round hydroponic suppliers.

As the need for the cultivation of medicinal marijuana grows, GreenGro Technologies’ stock price is poised to grow over the long term and should see some growth in the short term as more politicians advocate the use of medicinal marijuana.

4. Cannabis Science Inc.

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Cannabis Science Inc. (OCTQB: CBIS) is a medicinal marijuana company that leverages its unique understanding of metabolic processes in order to provide innovative treatment options for illnesses. Cannabis Science discovers and develops cannabinoid-based therapies to improve patients’ lives. The company develops cannabinoid-based pharmaceutical products in the U.S. for autism, cancer, cancer side effects, blood pressure and other illnesses. Additionally, it develops CS-TATI-1 for those with newly diagnosed and treatment-experienced patients with drug-resistant HIV strains. Moreover, Cannabis Science offers online video-based medical marijuana education with courses on medical cannabis law, cooking, horticulture and bud tending. It also manufactures and distributes specialty pet grooming and topical applications products.

In late September 2016, “the company launched a new medicinal product line in legal dispensaries within California for self-medicating patients.” [6] The company’s product lines are released based on patient usage data and the general public opinion of the medication. The new medicinal marijuana products will be at the forefront of the company’s new medicinal studies to target its initial critical ailment list, such as cancers, post-traumatic stress disorder, HIV/AIDS, COPD, pain management, seizures and muscle pain. All of the studies will be conducted through a doctor monitoring system to verify the validity of the medications.

Cannabis Science CEO & Co-Founder Raymond C. Dabney said, “Everything is coming full circle for our company. Just as we’re launching our new cannabis-based medication product lines, I have been invited to speak at Harvard Medical School, which will present us with the opportunity to tell our story to highly ambitious, and talented thought leaders, while inspiring the minds of our future leaders to lead on…Opportunities abound, and I am very excited to meet additional colleagues of like mind and spirit to help to run more effective drug development programs.”

Since the company will be presenting at one of the nation’s most prestigious medical schools, there will be an opportunity to more research, expansion and development of cannabinoid-based medications.

The ongoing need for treatments for various illnesses makes Cannabis Science another worthwhile short-term marijuana stock investment. Since both Hillary Clinton and Donald Trump advocate the legalization of medical marijuana, Cannabis Science should see some gains in its stock price as the election nears.

5. General Cannabis Corporation

General Cannabis Corp. (OTCQB: CANN) is a U.S. service-based cannabis company that engages in the acquisition and leasing of facilities and cultivation space to licensed growers and dispensary owners. Its services include on-site professionals, cash transport to licensed cannabis cultivators and retail shops, and video surveillance. In addition, it designs, distributes and sells apparel. Moreover, it offers cannabis consulting services comprising of compliance, cultivation, logistical support, facility design and building services.

As the medical marijuana industry grows, there will be the need for the services that General Cannabis offers. There could be theft, which is where General Cannabis will step in with its security services. Also, since there are still laws against marijuana, the consulting services will be useful for the majority of the industry. Consequently, the company’s revenues and earnings should grow substantially over the long term.

On September 22, 2016, General Cannabis announced its “completion of its initial closing of $3.0 million private placement transaction.” [7] The company issued $2.8 million of senior secured promissory notes and an aggregate 8.4 million warrants to purchase common stock. The proceeds of its debt offering will be used to fund the company’s expansion and repayment of its existing mortgages, and for working capital.

CEO Robert Frichtel said, “This debt raise will allow us to deliver increased value to our shareholders…We are managing our cost of capital through these transactions and creating a significant amount of working capital to continue our acquisition strategy in the marijuana industry.”

The new capital raised and replacement of existing debt will allow General Cannabis to take advantage of various opportunities in the cannabis industry. The potential growth in the cannabis industry makes General Cannabis another good short-term investment, and like the other four pot stocks, should see a rise around election time.

The Bottomline

The medical marijuana business is projected to grow substantially over the next few years, making these five marijuana stocks strong potential short- and long-term investments. The two leaders in the U.S. Presidential race are for the legal use of medical marijuana, which should cause these top five medical marijuana stocks to rise heading into the election.

Sources:

http://www.forbes.com/sites/katiesola/2016/04/19/legal-u-s-marijuana-market-will-grow-to-7-1-billion-in-2016-report/#5b02a948568d
https://finance.yahoo.com/quote/CBDS/profile?p=CBDS
https://www.mpp.org/2016-presidential-candidates/
http://www.otcmarkets.com/stock/GRWC/news?id=133953
https://finance.yahoo.com/news/greengro-technologies-unveils-advantageous-greengro-113000440.html
https://finance.yahoo.com/news/cannabis-science-launches-medicinal-product-144045402.html
https://finance.yahoo.com/news/general-cannabis-completes-initial-closing-143842110.html

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