Stock Spotlight: The Top 3 Pot Stocks to Own for the Next 10 Years

The marijuana story is growing like a weed.

Not only do 61% of Americans now support legalization, states are moving to legalize it with hopes for significant new revenue stream.

Canada will legalize its use in October 2018. 

The Canadian Senate overwhelmingly passed Bill C-45, also known as the Cannabis Act, which legalized the use of recreational marijuana. The law goes into effect on October 17, 2018. 

Corporate America has woken up to the opportunity, too.

In fact, Constellation Brands just increased its stake in Canopy Growth (CGC) by $4 billion.   

In short, there are plenty of reasons to get bullish on the sector.

That being the case, here are the top three pot stocks to buy and hold for the next decade.

OrganiGram Holdings (OGRMF)

OGRMF produces and sells medical marijuana in Canada. As Canada moves to legalize marijuana use on the federal level, the company is ramping up production to capitalize on new market opportunities as an existing licensed producer. An active expansion includes a 15,000 sq. ft. extract processing facility that could prove quite useful, as the market begins to explode.

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Another reason to like OGRMF is its agreement with Nova Scotia Liquor Corporation.

"We are pleased to announce our supply agreement with NSLC," says Greg Engel, Organigram's CEO. "Our home markets have always been a key priority for Organigram and this announcement solidifies our position as the market leader here in the Maritimes. With supply arrangements in place in six provinces, we take great pride in our place as a national leader working towards a sustainable and successful adult-use recreational cannabis market."

Fundamentally, there’s plenty of opportunity.

It posted record net sales for both the three-months and nine-months ended May 31, 2018 of $3.7 million and $10.1 million respectively vs. $1.9 million and $3.6 million respectively for 2017. A net income of $2.8 million was an increase of 162% compared to $1.1 million in Q2-2018 and a loss of $2.3 million in Q3-2017.

Canopy Growth (CGC)

CGC is also a medical marijuana company out of Canada that has considerable interest from Constellation Brands.  In fact, Constellation Brands just increased its ownership interest in Canopy Growth by acquiring 104.5 million shares directly from Canopy Growth, thereby achieving approximately 38% ownership when assuming exercise of the Constellation warrants.

“Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner,” said Rob Sands, Chief Executive Officer, Constellation Brands. “Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space. We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.”

Continued revenue acceleration with total first quarter revenue of $25.9 million represented a 63% increase over the quarter ended June 30, 2017 and a 14% increase over revenues of $22.8 million in the fourth quarter of fiscal 2018.

Scotts Miracle-Gro Company (SMG)

The company, which manufactures, markets and sells consumer lawn products globally is seeing great interest as the company expresses interest in selling to cannabis growers, too. In fact, they’re selling equipment for hydroponics, a method of growing that allows for the production of cannabis after acquiring General Hydroponics.  According to The Street, “the company’s revenue for the past 12 month is about $2.6 billion.  About a tenth of that comes from their hydroponics business.  That should grow, especially now…”

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