In the United States, medical cannabis is legal in 31 states and the District of Columbia. Nine of these, with D.C., have also legalized cannabis for adult use. In June, Canada became the second nation to legalize an adult-use market (due to open next month).
As states increasingly legalize cannabis and the industry grows throughout global markets, the potential for individual cannabis stocks to see an upside in prices reflects their ability to outperform.
Year to date, cannabis companies have seen a positive run, with 7 of the top 12 cannabis stocks, by market cap, posting returns of 200% or greater.
Shares of Canopy Growth Corp (OTCPK:TWMJF) are up more than 500% since Sept. 14, 2017, helped by direct investments from Constellation Brands. As of market close on Sept. 14, 2018, Canopy Growth Corp is the largest company in the cannabis industry, with a market cap of $10.81 billion.
The cannabis industry is rife with opportunities for investors: An alternative to investing in high-risk penny stocks is to allocate investment resources for more established and larger companies in the industry.
As cannabis stocks continue to rally, prudent investors should consider taking profits and exercising caution.
