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Cannabis stocks continue to be one of the hottest places to invest as it continues to be the fastest growing industry in the world.
Although investing in the cannabis industry might be an easy decision for some, many U.S. investors are still cautious since cannabis is still considered to be illegal at the Federal level.
We analyze cannabis companies by looking at metrics such as its financial structure, management team, track record, business model and recent initiatives, overall liquidity and cash flow, patents and intellectual property, just to name a few items.
Cannabis companies have recently become much more focused on building out their intellectual property portfolio and we are favorable on these initiatives. Today, we have highlighted two companies that have been making waves on these side of the business.
Lexaria: Continues to Execute and the Market has Noticed
Lexaria Bioscience (LXRP) has been a top performer over the last month and we think this company still has room to run. Despite the shares rallying 30% in the last month, LXRP is trading well below its 52-week highs and we think this is a stock investors need to watch.
Earlier this month, we highlighted Lexaria as a company positioned for growth following some important developments. The company has improved its fundamental story through the following developments:
1) Applied for a new patent from the U.S. after being granted a patent in Australia
2) Advanced its agreements and launched new businesses
3) Expanded its reach into Asia
4) Focused on R&D with major organizations
5) The cash position has improved significantly and Lexaria has fully funded new initiatives
We believe that these factors have positioned Lexaria for a major growth cycle and find the shares to still be attractive following the recent rally. LXRP has broken out of its lower bound trading range and we are excited by this one.
Canopy Growth: Significantly Expands its IP Portfolio
Canopy Growth (WEED.TO) (TWMJF) received a favorable response from the market after announcing that its partly-owned biopharmaceutical research and development subsidiary, Canopy Health Innovations has filed nine provisional patents pertaining to the applications of cannabis and cannabinoid based therapeutics in sleep and related nervous system disorders.
Like Lexaria, Canopy filed the patents in the U.S. Patents are intially filed in the U.S. to create a priority date and allow for future filings in other selected jurisdictions, including Canada. The filing is part of a concerted plan to bring to patients and healthcare providers innovative medicines and health products targeting disease areas with substantial medical needs.
The intellectual property side of the business is very important and these patents are a significant development when it comes to the long-term opportunity. We are favorable on the focus on intellectual property and continue to view Canopy Growth as one of the best long-term cannabis investments.