The legalization of recreational marijuana use has led to the creation of dozens of publicly traded companies seeking to carve out a space in what may be a potentially large growth industry. Now that the initial blush has worn off, however, these dozens of companies face the demands that all publicly traded companies have to confront: a sustainable business model led by a management team that has the experience and skill to execute to that model.

The single largest overhang for the industry remains federal law, which still prohibits marijuana use and prevents the industry from developing some of the most fundamental aspects of a thriving business. We have written before of the problems cannabis-related firms have establishing something as basic as a business bank account. Until federal law is changed to allow wider use of cannabis, the industry will continue to struggle with growth.

The other side of that legal coin is the continuing presence, even expansion, of illegally grown marijuana, which has the effect of keeping prices down. Ironically, perhaps, the industry is going to need some help from law enforcement in order to help stabilize prices for marijuana.

Strong Marijuana Harvest Will Drive Down Prices

Investment firm Viridian Capital & Research recently published its outlook for the cannabis industry in 2015, including a look at some 75 companies that participate in the various sectors of the industry. Viridian noted that marijuana-related firms raised $80.4 million in capital during 2014, with the three largest segments being consulting services ($20.1 million), ancillary cultivation and retail ($18.9 million) and biotechnology ($12.3 million).

Viridian also maintains an equal-weighted total return cannabis index that posted a gain in 2014 of 38.4%, primarily on the basis of a 939% return in the first quarter of last year. That is when sales of marijuana first became legal in Colorado. Sales began in Washington in June. Consulting services posted the highest return, 170%, followed by biotech (nearly 85%), infused products (57%) and cultivation and retail (33%).

Here is a list of the 10 largest cannabis-related firms sorted by market cap, as reported in the Viridian report. The data may be different today.

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 and has a market cap of $2.25 billion. Shares closed at $114.11 on Friday, and the stock’s 52-week range is $58.16 to $126.78.

Medbox Inc. is consulting services firm specializing in dispensary and licensing applications. The reported market cap for the company is $242.3 million. Medbox trades over the counter on the OTCQB under the ticker symbol MDBX.

Medical Marijuana Inc. is an investment and mergers and acquisition firm that trades over the counter on the OTCPink board. One of its portfolio companies, KannaLife Sciences, is developing a target drug candidate for treat concussions. The company’s reported market cap is $134 million.

PharmaCyte Biotech Inc. is a clinical stage biotech firm developing and commercializing cancer and diabetes treatments based on live-cell encapsulation technology, including a treatment using cannabinoids. The company’s reported market cap is $133.1 million and it trades over the counter under the symbol PMCB.

Cannabis Sativa Inc. has a reported market cap of $120.1 million and trades over the counter under the symbol CBDS. The company develops, manufactures, distributes and sells herbal-based skin products. Former two-term Libertarian governor of New Mexico, Gary Johnson, is the company’s president and CEO.

Estimated $10 Billion Marijuana Sales in 2015 Far Too Low

CannaVEST Corp. develops, produces and markets hemp-based cannabidiol products to the nutraceutical industry. The company’s reported market cap $88.2 million. The stock trades over the counter under the symbol CANV.

CannaGrow Holdings is a lessor, liaison and consultant to licensed marijuana growers in the state of Colorado. Because growing marijuana is strictly controlled and must meet strict site requirements, there are several companies that specialize in real estate issues. CannaGrow’s market cap is reported at $83.7 million, and it trades over the counter under the symbol CGRW.

Chuma Holdings Inc. is a consulting service that provides turnkey financing and support solutions to the legal cannabis industry in California. The company’s reported market cap is $60.1 million. Chuma trades over the counter on the OTCQB under the symbol CHUM.

Cannabis Science Inc. specializes in cannabis formulation-based drug development and related consulting. The company’s reported market cap is $58.6 million. The stock trades over the counter on the OTCQB under the symbol CBIS.

CannLabs Inc. has a reported market cap of $56.9 million. The company provides consulting services and cannabis testing technologies and methodologies. The company’s stock trades over the counter under the symbol CANL.

ALSO READ: Marijuana Prices Drop 5%

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