In an article titled “Growing Marijuana Stocks”, the energy industry newsletter ‘Energy And Capital’ declared stock market investments in marijuana companies to be on the rise. The newsletter also cautioned about certain segments of the industry that may not be good investments.
Swagato Chakravorty’s article uses Easton Pharmaceuticals (OTC: EAPH) as an example. This company has announced plans to enter the American and Canadian marijuana market.
Chakravorty writes that, “Easton designs and develops a range of topical healthcare products for commercial purposes. The burgeoning marijuana sector is a highly attractive one, and that’s why Easton will employ third-party consultants to help it open up boutique clinics in Canada and the U.S. Within the latter, Easton hopes to start out with the relatively “friendly” states of Michigan and California.”
Easton’s press release on Business Wire quotes their President, John Adams, as saying:
Easton has chosen to participate in this industry that has slowly over the last few years received recognition for its medicinal benefits. The United States congress was to have made a final decision approving the use of medical marijuana in limited ways, but recently adjourned the final decision for later in the year.
The Energy and Capital article declares medical marijuana is becoming ”a major industrial sector” that is growing from $1.7 billion in 2011 to a projected $9 billion industry in just a few years.
Other success stories are cited in the article. Colorado’s CannLabs tests smokables and other cannabis products; they are projected to double their sales and open a second location during 2013.
Washington State’s Privateer Holdings purchased Leafly in 2012. Leafly is a product review website for the marijuana industry; Privateer turned the company from unprofitable to a $3-$4 million annual revenue website whose traffic grows by 20% every month.
Author Chakravorty does give a caution to the investors reading his article. “(I)t’s much safer to remain on the periphery of the sector—I mean businesses like software development for product supply chain tracking—than to dabble directly in growing and dispensing. Banking and legal representation still remains problematic.”
Source: The Compassion Chronicles
