The Zacks Analyst Blog Highlights: Innovative Industrial, GW Pharmaceuticals and Canopy

For Immediate Release

Chicago, IL –October 4, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Innovative Industrial Properties, Inc. IIPR, GW Pharmaceuticals plc GWPH and Canopy Growth Corp. CGC.

Here are highlights from Thursday’s Analyst Blog:

Pot Stocks to Win as America Continues Decriminalizing

The past six months haven’t been favorable for the marijuana industry. The Horizons Marijuana Life Sciences ETF, one of the primary exchange-traded funds focused on marijuana, tanked nearly 35% from the end of March till last month.

However, marijuana stocks have reversed losses as a new report shows that Americans are currently in favor of decriminalizing all drugs. Almost 55% of adults polled by Cato Institute said that drug offenses should be treated as civil violations and that it shouldn’t carry jail term. What’s more, polls have found that Americans are strongly in favor of legalizing marijuana.

The FDA has already approved the first marijuana-derived drug, with quite a number of U.S. states green-lighting cannabis in some capacity last year. Nearly two-thirds of all states in the United States have legalized medical marijuana and 10 of them, in fact, allowed adult consumption. And how can we forget that President Trump signed the Farm bill into law last November, legalizing hemp and cannabis-based products throughout the country.

Canada, in the meantime, legalized recreational weed. This development had, undoubtedly, cemented the way for billions of dollars in legitimate annual sales and helped the pot market come out from the shadows as a reliable business model.

The Horizons Marijuana Life Sciences ETF had shed its earlier losses to trade up 1.6% on Oct 2, with 24 of its constituent stocks trading northward. Korey Bauer, portfolio manager at the Cannabis Growth mutual fund, added that “valuations on a select group of cannabis companies are starting to look appealing at these levels.”

Last but not least, global consumer marijuana outlays are estimated to climb 38% to $16.9 billion this year from a projected $12.2 billion last year, $9.5 billion in 2017, and $6.9 billion in 2016, according to Arcview Market Research and BDS Analytics. Additionally, compounded global annual sales growth of cannabis from 2017 to 2022 is expected at $31.3 billion.

To top it, Investment bank Cowen & Co said that the legal weed market is expected to reach a worth of as much as $75 billion by 2030. This indicates that there are plenty of opportunities for investors to make money from both direct and subsidiary players.

But a few skeptics may say that the current outbreak of severe lung disease that is tied to vaping may affect the marijuana market. However, people are largely indifferent to the outbreak and clearly consumers aren’t discouraged from vaping cannabis products.

Fast-Growing Marijuana Stocks to Consider

As encouraging developments are expected to make marijuana stocks winners this month, take a look at these selected few poised to move north this year.

Innovative Industrial Properties, Inc.focuses on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. With more states in the United States giving cannabis the green light, Innovative Industrial Properties has incentive to acquire additional properties.

The company currently has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has climbed nearly 2% over the past 60 days. The company’s expected earnings growth rate for the current year is 92.5%, in contrast to the REIT and Equity Trust - Other industry’s projected decline of 1.8%.

GW Pharmaceuticals plcfocuses on discovering, developing, and commercializing cannabinoid prescription medicines using botanical extracts derived from the Cannabis plant. The cannabinoid drug maker is expected to see an uptick in sales this year, especially, after its lead drug Epidiolex became the first cannabis-derived drug to gain FDA approval.

The company currently has a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its next-year earnings has moved up more than 100% over the past 60 days. The company, which is part of the Medical - Products industry, is expected to record earnings growth of 68.8% and 70.2% in the current and next quarter, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

Canopy Growth Corp.engages in growing, possessing and selling medical cannabis in Canada. In fact, in terms of aggregate sales, the company may find itself at the top spot. The company’s annual production comes in at more than 500,000 kilograms and is positioned to increase on branding and partnerships.

The company currently has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its next quarter earnings has risen 25% over the past 60 days. The company’s expected earnings growth rate for the current year is 32.1%, compared with the Medical - Products industry’s estimated rally of 8.3%.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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