The cannabis industry made significant strides during 2016 and we think this is just the beginning…
Although 2016 was a banner year for the cannabis industry, we expect 2017 to be even more significant. As we approach the end of 2016, we want to take the opportunity to highlight the most important themes, the top investments for 2017 and the top 10 stocks flying under the radar.
Today we released Technical420’s Top 10 Cannabis Developments of 2016 and this is the first chapter of a three-part series being released this week.
Top 10 Cannabis Industry Developments of 2016
- State-wide elections proved to be major success with the approval of recreational cannabis in California, Massachusetts, Maine and Nevada, and the adoption of medical cannabis laws in Arkansas, Florida and North Dakota.
- GW Pharmaceuticals (GWPH) proves that cannabis has medical benefits by delivering positive FDA Stage III clinical trial data on its Epidiolex cannabinoid product
- A Canadian federal task force issued recommendations for the implementation of a regulated recreational cannabis market. The task force recommended using the existing system for medical cannabis to regulate recreational cannabis. They also suggested a minimum age of 18, limitations on packaging, increased caution with edibles and the use of taxes to fund administration, education, research and enforcement. The task force recommended using the same tax system for both medical and recreational cannabis and placing heavier taxes on high potency products to discourage their use by the general public.
- A cannabis legalization revolution is not just taking place in the United States. We are seeing cannabis reform taking place all around the world. Last year, Puerto Rico Governor Alejandro Garcia Padilla signed an executive order to legalize medical cannabis. In 2014, Uruguay legalized both medical and recreational marijuana. This is a trend that has shown no signs of slowing down as countries including Australia, Germany, Jamaica, Israel, Netherlands Portugal and Uruguay continue to advance the legal cannabis industry.
- Wall Street significantly increased its focus on the cannabis industry. This development was highlighted by Goldman Sachs initiating coverage on GW Pharmaceuticals (GWPH), boutique-investment bank Cowen and Company initiating coverage on OTC-traded Kush Bottles (KSHB), and Morgan Stanley assisting with potential cannabis M&A activity.
- Canopy Growth Corp (CGC.TO) (TWMJF) became the first licensed Canadian medical cannabis producer to have a $1+ billion market capitalization. Canopy continues to be a global cannabis leader as it continues to expand its presence internationally and make strategic acquisitions (recently announced the acquisition of Mettrum Health)
- The Gallup poll showed record levels of support for marijuana legalization. The poll reported that 60% of participants support cannabis legalization which is up from 12% when it was first conducted in 1969.
- The DEA denied the rescheduling of cannabis in early August and then added cannabidiol to its list of Schedule I substances.
- Colorado surpassed $1 billion in legal cannabis sales so far this year. This number does not include the amount of legal cannabis sold in November and December. Colorado is expected to sell between $1.2 and $1.3 billion in legal cannabis this year.
- The first cannabis-related Real Estate Investment Trust (REIT) conducted an initial public offering on the New York Stock Exchange. Last week, NYSE-traded Innovative Industrial Properties (IIPR) completed the acquisition of PharmaCann’s 127,000 square foot medical cannabis cultivation and processing facility in New York.
Important Investor Disclosures
Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report