Top 4 Cannabis Ancillary Stocks You Should Buy In 2021

The global marijuana market is growing at a fast pace and investors want to be a part of this growth story. A report by Grand View Research Inc. says that the global legal marijuana market size is expected to reach $84.0 billion by 2028, and is expected to expand at a CAGR (compounded annual growth rate) of 14.3% from 2021 to 2028. The report says, “Increased legalization of marijuana for medical and adult use and the growing adoption of these products for the treatment of chronic diseases are the key factors driving the market for legal marijuana.”

While this is good news for the industry as a whole, a major challenge for investors is hunting good stocks to invest in. There are companies like Aurora Cannabis that promised the moon three years back but have destroyed a lot of investor wealth in the subsequent years. Investors are on the lookout for stable companies in a new industry and that is a little tough. 

Image source

One way to circumvent this challenge is to not look at companies that are directly related to marijuana, i.e. growers and retailers who have to touch the plant. Investors can look at companies that are essential to the success of marijuana companies but are not directly involved in the process themselves. Here are four such marijuana-ancillary companies:

Innovative Industrial Properties (IIPR)

IIPR (Innovative Industrial Properties) is one of the smartest plays in the marijuana sector. It has a simple operation: It buys real estate and then leases it out to marijuana companies. It is the first company on the NYSE that operates in the real estate space in the cannabis industry. As of March 11, 2021, IIP owned 68 properties located in 18 US  states, representing a total of approximately 5.9 million rentable square feet (including approximately 2.1 million rentable square feet under development/redevelopment), which were 100% leased with a weighted-average remaining lease term of approximately 16.7 years. That’s assured revenue for almost 17 years! Businesses would kill for such predictability. 

1 2 3 4
View single page >> |

Disclaimer: All the information in this article - is published in good faith and for general information purpose only. Hashtag Investing does not make any warranties about the completeness, ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.