Some people may envision the legalization of marijuana as an opportunity for someone like Philip Morris to start selling marijuana cigarettes. It is much closer to the truth to say that marijuana is showing potential for medical uses, and companies that are developing medical applications for the plant stand to gain in the marketplace.
The rush to get in on the marijuana craze has created hundreds of startups, but the odds are that many of these will fail. The winners so far are established companies that are adding marijuana to their focus. However, even some of these winners have seen drops in their stock prices lately. (See also: Want to Make Money in Marijuana? Read This First.)
We have selected four marijuana stocks that have the potential to make significant gains. These stocks were chosen based on their array of marijuana-related products. These products are either in use or awaiting approval by the Food and Drug Administration (FDA). All figures are current as of Nov. 5, 2017.
AbbVie a pharmaceutical company that is ahead of the pack because it has a cannabis-based drug on the market. The FDA approved Marinol, which helps alleviate nausea or vomiting for chemotherapy patients. The drug also helps AIDS patients who have lost their desire to eat. It is important to note that Marinol is not AbbVie’s flagship drug. In fact, it is not even the company’s biggest seller.
AbbVie has reported increasing revenues in the past four years. In addition, its operating income has been increasing steadily. The company is benefiting from a host of useful drugs, including Marinol. Therefore, AbbVie is a way to play the marijuana trend without incurring 100% exposure to the plant. The risk of owning AbbVie is that it concentrates almost exclusively on U.S. markets, whereas most pharmaceutical companies market internationally. If the domestic market falters, the stock could see a drop in value. For investors, this risk is offset by the dividend, which is 3.08%. (For more, see: AbbVie Tops Q2 Earnings and Revenue.)
An interesting way to play the marijuana boom is Scotts Miracle-Gro. Known for its lawn and garden-care lines, the company is developing products for cannabis growers and also several pesticides for use on marijuana plants.
The stock had…