Cannabis Companies on the Rise

2019-01-04 10:54:54 AM ET (ACCESSWIRE)


HENDERSON, NV / ACCESSWIRE / January 4, 2019 / According to Arcview Market Research and its research partner BDS Analytics, over the next 10 years, the legal cannabis industry will see much progress around the globe. Spending on legal cannabis worldwide is expected to hit $57 billion by 2027. The adult-use (recreational) market will cover 67% of the spending; medical marijuana will take up the remaining 33%.


Companies growing cannabis as well as the companies supplying and powering that cultivation are set for rapid growth. We've highlighted a few companies set to benefit below.

Aphria, Inc. (APHA) (Market Cap: $1.503B, Share Price: $5.97) announced that its Colombian subsidiary, Colcanna SAS has signed an exclusive agreement with the Federación Medica Colombiana, a national guild that oversees the ethical exercise of the medical profession in Colombia, to jointly develop an academic curriculum on the medicinal use of cannabis.


One such company, Clean Spark, Inc. (CLSK), has the best in class microgrid solution for the cannabis industry. Additionally, CLSK is one of the top microgrid companies in the entire world, currently working with NYSE company MAC on a potential $18 million project. If this is your first-time hearing about CLSK start your due diligence immediately because when the street finds out about the company it could trend much higher.


Today we are highlighting: CleanSpark, Inc. (CLSK), Aphria, Inc. (APHA), Canopy Growth Corporation (CGC), Innovative Industrial Properties, Inc. (IIPR), and The Scotts Miracle-Gro Company (SMG).


The $3.5bn cannabis industry is one of the nation's most energy intensive, often demanding 24-hour indoor lighting rigs, heating, ventilation and air-conditioning systems at multiplying grow sites. Legal cannabis cultivation in the U.S. consumes an estimated 1.1 terawatt-hours of electricity a year, according to the 2018 Cannabis Energy Report, published by Scale Microgrid Solutions along with New Frontier Data and the Resource Innovation Institute. Companies managing these solutions are great ways to diversify your cannabis industry risk.


Indoor growers are looking to cut spiraling electricity consumption with custom-built microgrids in U.S. states where cannabis cultivation is legal.


A company that seems to be in the right place at the right time to capitalize on this huge market inefficiency is CleanSpark, Inc. (CLSK) (Market Cap: $85.893M, Share Price: $2.35).


CLSK has a unique microgrid solution for the cannabis industry. Their mPulse software reduces the monthly electricity bill of indoor grow-houses by up to 82%! They do this by virtually eliminating the demand charges that can account for almost 50% of the utility charges for such a facility.


Pressure is mounting on the cannabis industry to improve its margins after a lackluster 3rd quarter, companies like CLSK can help do just that.

CLSK also just released an impressive letter to shareholders highlighting: an agreement for an $18.3 million 'Zero Net Energy' Microgrid with an S&P 500 Member Real Estate Investment Trust (REIT), near completion on a $900,000 contract to install a 'turn-key advanced microgrid system' at the U.S. Marine Corps Base Camp Pendleton, they have been awarded 2 patents, and they updated an acquisition that could be a huge boost to the company's year-end revenues.

CLSK's acquisition, Pioneer Custom Electrical Products, has delivered $32 million in products since 2016 and has $5 million in backlog. They have also received a $2.4 million equipment order as part of a contract for the new U.S. Embassy in Beirut, Lebanon which should end up on CLSK's balance sheet.

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Canopy Growth Corporation (CGC) (Market Cap: $9.709B, Share Price: $28.11) announced earlier this month that it had entered into a multi-year agreement with Valens GroWorks Corp, a licensed, vertically integrated provider of cannabis products and services focused on various proprietary extraction methodologies, distillation, cannabinoid isolation and purification.


A company standing to benefit from Cannabis growth while not directly involved in its production like CLSK, is Innovative Industrial Properties, Inc. (IIPR) (Market Cap: $440.693M, Share Price: $45.08) a real estate investment trust that specializes in the medical marijuana industry. A REIT allows investors to pool their money to own real estate properties and it has a unique distinction that provides some safety for investors: REITs are required to distribute at least 90% of taxable income to shareholders as dividends.


The Scotts Miracle-Gro Company (SMG) (Market Cap: $3.429B, Share Price: $61.97) another company set to make big money off of marijuana growers, has quickly become the top supplier to the U.S. cannabis industry. Thanks to a string of acquisitions, Scotts Miracle-Gro's Hawthorne Gardening subsidiary now offers a wide range of products to marijuana growers including fertilizers, hydroponics, irrigation systems, lighting systems, and ventilation systems used in cultivating cannabis.