The November election wound up with eight states added to the number of them where either medical or recreational marijuana (or both) are or will be legally for sale. Medical marijuana is now legal in Arkansas, Florida and North Dakota, and Montanans voted to eliminate legislatively imposed restrictions on access to medical marijuana. California, Massachusetts, Maine and Nevada approved recreational use of marijuana.
Recreational marijuana use is now legal in seven states and the District of Columbia, while medicinal use is legal in 20 states. According to the 2016 Marijuana Business Factbook published last March, the impact of cannabis products on the U.S. economy will rise from an estimated total of $14 billion to $17 billion this year to an estimated $44 billion by 2020. The estimates are based on sales of medical and recreational marijuana at the retail level, including flower, infused products and concentrates. For each dollar spent at retail, the Factbook estimates that the economic benefit realized amounts to an additional three dollars.
Which companies will be earning those billions? Analysts at Viridian Capital Advisors maintain a cannabis stock index, and for 2016 through December 9, the index is up 175.3%.
Viridian divides its index into sectors under two main categories: ancillary products and services, and “touching the plant.” The sectors posting the biggest year-to-date gains are the biotech/pharmaceutical and the cultivation/retail sector, up 413.3% and 290.7%, respectively.
By the way, while 2016 growth is impressive, it pales compared to the 2014 annual gain of 383.5%.
Of the 10 largest (by market cap) U.S.-listed companies, nine are biotech/pharma firms and just one “touches the plant.” In Canada, the three largest cannabis firms are all growers, and these three firms qualify for a place in the largest marijuana businesses in North America.
Here is a list of the 10 largest cannabis firms in North America, ranked on the basis of market cap. The data are accurate as of December 21, 2016, and were provided by Viridian Capital Advisors. Unless otherwise noted, all amounts are presented in U.S. dollars.
> Market cap: $2.87 billion
> Year-to-date stock price change: +64%
GW Pharmaceuticals PLC (NASDAQ: GWPH) is a biopharmaceutical company that develops and commercializes therapeutics using a proprietary cannabinoid product platform. The company is included in the Nasdaq biotechnology index. Shares closed at $114.24 on Friday, December 23, and the stock’s 52-week trading range is $79.62 to $137.88.
> Market cap: $780.6 million
> Year-to-date stock price change: +192%
Toronto-traded Canopy Growth Corp. (TSE: CGC) is a diversified cannabis company that produces and sells legal marijuana in the Canadian medical market. The Trudeau government’s promise to legalize recreational pot use is viewed as a huge positive for this company. Shares closed at C$9.35 on Friday, and the 52-week range is C$2.97 to C$17.86.
> Market cap: $664.6 million
> Year-to-date stock price change: -68%
Insys Therapeutics Inc. (NASDAQ: INSY) is a biopharmaceutical company that has had two cannabis-based drugs approved by the U.S. FDA. The most recent drug approval, Syndros, boosts appetite for cancer and AIDS-related patients suffering from weight loss. Shares closed at $9.21 on Friday, in a 52-week range of $8.70 to $29.75.
> Market cap: $433.8 million
> Year-to-date stock price change: +311%
Aurora Cannabis Inc. (OTC: ACBFF) also trades on Toronto’s venture exchange and is another Canadian company focused on growing and selling medical marijuana. It grows both psychoactive THC products and medically oriented CBD products. Shares closed at $1.67 on Friday. The stock’s 52-week range is $0.31 to $2.96.