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Discover the best cannabis stocks to buy in 2021 as the industry continues to grow. Learn about the top companies in the space and how to invest in the sector.
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Introduction
The legal cannabis industry is expected to reach $73.6 billion in sales by 2027, according to a report by Grand View Research.
This projection is based on the legalization of recreational use in Canada and several US states, as well as the decriminalization of the plant in many countries around the world.
With such rapid growth expected in the coming years, now is an ideal time to invest in cannabis stocks. But with so many companies to choose from, it can be difficult to know which ones are worth your money.
Here are three cannabis stocks that are worth considering in 2021:
1) Canopy Growth Corporation (TSX:WEED)
2) Aurora Cannabis Inc (TSX:ACB)
3) Aphria Inc (TSX:APH)
The U.S. Market
The U.S. Market – Size and Growth
The United States is the world’s largest cannabis market, with a size of $13.6 billion in 2019. The market is expected to grow at a compound annual growth rate (CAGR) of 14% to reach $30.6 billion by 2025. The industry is mostly driven by the increasing legalization of cannabis across various states, which has resulted in a significant increase in the number of users. In addition, the development of new products and formulations, such as CBD-based products and edibles, is also expected to contribute to the growth of the industry.
The U.S. Market – Key Players
The U.S. cannabis market is expected to grow at a compound annual growth rate of 14.7% from 2021 to 2026, according to Grand View Research. This means the market will be worth an estimated $39.6 billion by 2026, up from $10.8 billion in 2019.
The U.S. market is still in its early stages, and there are a number of key players that are expected to have a significant impact on the future landscape. Some of the most notable companies include:
-Acreage Holdings (OTCQX:ACRGF)
-Canopy Growth (NYSE:CGC)
-Curaleaf Holdings (OTCQX:CURLF)
-Green Thumb Industries (OTCQX:GTBIF)
-Tilray (NASDAQ:TLRY)
These companies are all major players in the U.S. cannabis market, and they are all worth keeping an eye on in 2021 and beyond.
The Canadian Market
The Canadian cannabis market is expected to be worth $23.9 billion by 2025. With the legalization of recreational cannabis in October 2018, the market is expected to grow exponentially. Many investors are wondering which cannabis stocks to buy in 2021.
The Canadian Market – Size and Growth
The Canadian cannabis market is expected to grow from $2.5 billion in 2019 to $5.2 billion by 2025, representing a compound annual growth rate (CAGR) of 11.7%.1 This growth is driven by the increasing legalization of cannabis for both medical and recreational use across the country, as well as the launch of new adult-use markets in Quebec and Ontario.
The Canadian cannabis market is currently the world’s second largest, behind only the United States.2 It is also one of the most mature markets, with a large and growing number of licensed producers, retailers, and consumers.
There are a number of factors that make the Canadian cannabis market an attractive investment opportunity:
-Size: The Canadian cannabis market is expected to be worth $5.2 billion by 2025, making it one of the largest markets in the world.
-Growth: The market is expected to grow at a compound annual rate of 11.7% between 2019 and 2025.
-Legalization: Cannabis is legal for both medical and recreational use across Canada, making it one of the most open markets in the world.
-Infrastructure: The Canadian cannabis industry has developed a significant infrastructure, including licensed producers, retailers, and testing facilities.
The Canadian Market – Key Players
The three key players in the Canadian market are Canopy Growth Corporation (WEED.TO), Aurora Cannabis Inc. (ACB.TO), and Aphria Inc. (APH.TO).
Canopy Growth Corporation is the largest cannabis company in the world, with a market cap of over $20 billion. Canopy is a diversified cannabis company, with operations in 11 countries across 4 continents. The company’s flagship brands are Tweed and Spectrum Therapeutics.
Aurora Cannabis is one of the largest cannabis companies in Canada, with a market cap of over $6 billion. Aurora is a vertically integrated cannabis company, with operations in 25 countries across 5 continents. The company’s flagship brands are CanniMed and MedReleaf.
Aphria is one of the leading global cannabis companies, with operations in 10 countries across 5 continents. The company has a market cap of over $3 billion and its flagship brand is Aphria One.
Conclusion
While the above companies all have their merits, one that looks like a particularly intriguing opportunity right now is HEXO (NYSE:HEXO). This Canadian company has formed a joint venture with Molson Coors (NYSE:TAP) to create Truss, a new line of cannabis-infused beverages that should start hitting store shelves later this year.
HEXO is also working with Bristol-Myers Squibb (NYSE:BMY) on cannabinoid-based drug candidates for treating pain and inflammation. This partnership gives HEXO some much-needed credibility with big pharmaceutical companies. In addition, HEXO has been aggressively expanding its international reach. The company recently announced a joint venture in Greece and has hemp operations in Kazakhstan.
Investors seem to be souring on the cannabis industry as a whole, but HEXO looks like it could be a good long-term bet on the category.
