Pick and Shovel play means investing in companies that supply the equipment for an industry instead of the final product. Technical 420, a company that conducts research and analysis on marijuana stocks, published an article entitled “Fortunes are made in the Pick & Shovels of the Industry.” What does this imply? Ancillary enterprises or Cannabis pick and shovel companies can be the key to the next trillion-dollar industry.
Money Morning.com shared interview excerpts of CEOs and top executives about their analysis about the marijuana industry. Hightech Extracts President Paul Gelardi said he recommends investors to put money in companies that manufacture or distribute cannabis shovels. Shovel indicates modern pot manufacturing platforms and technologies. The engineering firm develops systems for making extract-based merchandise.
Here’s an advice from industry experts. Cannabis pick and shovel companies are making their mark in this US$10 billion business. The following are 10 of these firms to consider:
- Breath Technology (Breathtec Biomedical) collaborated with Cannabix Technologies to produce the Breathalyzer for detection of diseases. It also manufactures breath-testing apparatus for detection of THC used. THC is marijuana’s psychoactive element.
- Canadian cannabis firm True Leaf is close to becoming a licensed manufacturer. It operates True Leaf Med and True Leaf Pet. The first is the company’s primary production and distribution facility. The second produces hemp-based commodities that focus on domestic pets.
- Organigram and Canopy Growth signed a recent supply agreement that includes retail and distribution services. Organigram Incorporated is one of the prominent licensed medical cannabis producers.
- Radient Technologies focuses on the extraction of Cannabidiol. It employs a patented technology known as Microwave Assisted Processing. MAP facilitates efficient extraction to cut down processing, reduce losses, and increase quantity. Aurora Cannabis from Canada invested $2 million initially and another $12 million in December 2017.
- Grow Generation supplies cultivating gear and supplies to the weed industry. The equipment includes hydroponic tools, organic nutrients, lighting equipment, and different soil varieties. In 2016, this little-known marijuana pick and shovel play reported an amazing 130% increase in revenues. Incidentally, Grow Generation remains as one of the most undervalued shares in the industry.
- Quadron Cannatech Corporation focuses on making cannabis concentrates. The company introduced automated extraction and processing techniques. A team of scientists, engineers, and manufacturers developed these solutions.
- Scotts Miracle-Gro has been an acknowledged leader if gardening and lawn care for almost 150 years. Two years ago, the company ventured into the marijuana sector. Scotts acquired two companies specializing in soils and fertilizers for cannabis planters. After a year, it invested at least 75% in a hydroponics equipment form called Gavita International.
- Constellation Brands owns Corona Beer. It diversified and decided to invest in the lucrative legal cannabis industry. Constellation recently purchased a 9.9% share in Canopy Growth Corporation. Canopy stands as the biggest publicly-listed legitimate weed corporation. The $191 million investment provided Constellation power in this booming enterprise.
- The technology giant Microsoft Corporation joined the cannabis bandwagon. It partnered with Kind Financial, a California start-up firm assisting marijuana providers in conforming to legal standards. Microsoft takes care of the software side to ensure government compliance.
- Canada’s Namaste Technologies manufactures marijuana paper, pipes, and vaporizers. Namaste’s principal product is Guru. It vaporizes liquids, dry herbs, and concentrates.
Many property owners work with these Cannabis pick and shovel companies in growing pot. Some pharmaceutical firms also collaborate with marijuana firms. The network continues to grow as investors wait for the bug business to become bigger.
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