Look Beyond Pharma to Invest in Marijuana Industry

The problem with investing in companies servicing the marijuana industry is that many of them are private, so buying their stock can be tricky for individual investors. However, there are several publicly-traded companies that have exposure to the marijuana industry. One of these companies is Scotts Miracle-Gro Co (NYSE:SMG), which is mostly known as one of the leading lawn care companies in the US, which sells fertilizers and pesticides. It owns around half of the lawn care market in the US and is the exclusive marketing agent for Monsanto Company (NYSE:MON)’s consumer Roundup weedkiller products in the US and several other countries.  However, Scotts Miracle-Gro Co (NYSE:SMG) also invested in hydroponics in order to serve the marijuana market. Hydroponics systems are very important for growing marijuana and the company plans to continue strengthening its position in the industry.

Real estate is another opportunity to get exposure to the marijuana industry as companies lease space for dispensaries and growing facilities. There are several real estate investment trusts that own properties that are leased to marijuana-focused companies. One REIT that is public is Innovative Industrial Properties Inc (NYSE:IIPR), which is small and has a market cap of just $105 million. Innovative Industrial Properties Inc (NYSE:IIPR) is focused solely on acquisition and management of industrial properties leased to companies that require medical-use cannabis facilities and it has a dividend yield of 3.30%.

To sum up, healthcare stocks are not the only opportunity to gain exposure to the marijuana industry and even though there aren’t many publicly-traded non-healthcare companies, their numbers should grow as the market expands and the industry regulation becomes more clear, paving way for more companies to get listed. In the meantime, Phyto Partners and other VC funds are investing heavily in marijuana startups, aiming for high returns once these companies hit the market.