Cannabis is among the most valuable crops in the United States. According to Leafy’s Cannabis Harvest Report 2021 (PDF), it’s estimated to be worth $6.2 billion — and that’s just in the 11 states where it’s legal for adult retail purchase.
The Agrify growing platform starts with genetics. Growers pick from a list of pre-selected strains that work with the Agrify system. Since the system is working with a known quantity, the platform can maximize the yield by controlling several vital variables, including lighting, watering and humidity. There’s no more guessing. Select the genetics, and let Agrify’s system take it from seed to store.
The company’s high-tech vertical farming units (VFUs) are key to the operation. These growing racks house and grow high-value plants like cannabis, hemp and other herbs. The units stack, allowing cultivators to grow two sets of plants with the footprint of one. Gangplanks link the units.
• Constellation Brands, Inc. Class A (STZ). Spirits are Constellation’s main game, but like Altria, this company is diversifying into cannabis via investment in Canopy Growth (CGC), a Canadian cannabis producer. Holding a 38.6% share of the company, Constellation saw a substantial return on investment in 2020. While not a pure cannabis play, this analyst-favorite stock is having a heyday with a one-year return of almost 15% and a dividend yield of 1.5%.
With the growing acceptance of cannabis among American consumers and their elected representatives, this edgy asset class offers your portfolio an excellent source of growth. According to data from Leafly, an online marijuana marketplace, legal U.S. cannabis sales—medicinal and recreational—increased 71% in 2020, to a total of $18.3 billion.
• Scotts Miracle-Gro Co. (SMG). Where does a company best known for plant fertilizers come into the cannabis mix? If you can make backyard plants grow, odds are you can make cannabis grow. For investors looking for the proven track record of a large cap stock with a leg in the growing cannabis industry, Scotts could be a fit. It’s acquired multiple cannabis-adjacent and pure cannabis companies and even built a brand new 50,000 square foot facility for R&D to explore how their fertilizer products impact cannabis growth. With a P/E ratio around 15.7 and a 1.7% dividend yield, Scotts stands as a respectable choice for investors exploring cannabis in their portfolios.
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• Cronos Group (CRON). As a global brand that makes a wide variety of adult-use cannabis and CBD products, year-over-year sales are up a respectable 58%. Maybe it’s the pandemic. Maybe it’s a carefully cultivated reputation for high-quality cannabinoids. Either way, Cronos displays controlled growth, but investors need to have a sense of adventure, with its 52-week price fluctuation between $4.92 and $15.83 per share.
• Amyris Inc. (AMRS). Buckle up because this stock has gained nearly 450% since this time last year. Amyris has been working to create synthetic cannabinoids that could revolutionize the industry and make it less reliant on large, expensive growing facilities. With a $4.5 billion market cap, Amyris most recent quarterly results posted quarter-over-quarter sales figures up 74.4%. No dividends to report yet, but investors willing to take on the risk of this up-and-coming stock when it hit a low of $1.88 per share in November 2020 would now hold shares worth over $15 each.
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• Altria Group Inc. (MO). You’ll know this stock best as the maker of Marlboro and one of the behemoths in the tobacco sector (along with its dabblings in the adult beverage industry). Because of that, for ESG investors, Altria’s likely not an option. For those who don’t mind the vice, the company’s making a play for cannabis, holding a substantial stake in Cronos Group, detailed above. While the stock took a substantial hit from its investment in JUUL, share prices have been near their one-year highs. Analysts have noticed and the stock comes complete with several Buy and Strong Buy ratings and a dividend yield that only stocks in this sector can bear: 7.2%.