Auxly Cannabis (NASDAQOTH:CBWTF) and MariMed (NASDAQOTH:MRMD) aren’t your run-of-the-mill marijuana stocks. Both Auxly and MariMed claim characteristics that differentiate them from the rest of the pack.
The Case for MariMed
MariMed isn’t profitable yet, either. However, the company’s revenue has steadily increased to nearly $3.4 million in the latest reported quarter. And investors have liked what they’ve seen with MariMed, making it one of the best U.S. marijuana stocks of 2018.
Like Auxly Cannabis, MariMed has taken the road less traveled in its entrance into the marijuana industry. The company started out offering advisory services to other cannabis-focused businesses for the design, development, funding, and operation of medical cannabis cultivation facilities, production centers, and dispensaries. However, MariMed has shifted its strategy and is now buying out its customers.
MariMed hasn’t thrown in the towel on providing advisory services. Actually, in October 2018, the company acquired BSC Group, which provides licensing, consulting and operations management services to U.S. cannabis businesses.
But MariMed sees a tremendous opportunity in two markets that made it eager to move beyond just consulting. One of those markets is the U.S. medical marijuana market. Thirty-three states have legalized medical marijuana, with many of these opportunities still in their very early stages.
The company is also excited about the U.S. hemp market. With the passage of the 2018 farm bill in December, hemp is now legal in the U.S. Cannabis market research company Brightfield Group projects that the U.S. hemp-based cannabidiol (CBD) market could reach $22 billion by 2022.
In November, MariMed jumped into the hemp CBD market with a strategic investment in hemp grower GenCanna. The company followed up with the establishment of a wholly owned subsidiary, MariMed Hemp, in January that is focused solely on the hemp CBD market.
Better Marijuana Stock
Auxly’s vertical integration appears to be a smart approach. MariMed’s focus on the U.S. medical cannabis and hemp CBD markets also seem to be good long-term moves. But it’s too soon to know whether either of these companies’ strategies will actually succeed.
For now, the best way to pick between these two marijuana stocks is based on their growth opportunities. I think MariMed gets the nod over Auxly Cannabis.
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