There are a lot of options in the medicinal cannabis industry for investors to choose from at present.
But as far as one fund manager is concerned, the one to buy is Cann Group Ltd (ASX: CAN).
What is Cann Group?
Cann Group was the first Australian company to receive a licence and subsequent permit from the Federal Government to cultivate medicinal cannabis in Australia.
It aims to cultivate and manufacture a range of medicinal cannabis products for patients in Australia. These extracts will be provided to researchers and prescribing clinicians to investigate, understand and optimise the therapeutic effectiveness of medicinal cannabis for specific medical conditions.
One of its competitive advantages is that through its relationships with organisations both in Australia and overseas, Cann has obtained elite genetic materials to develop specific genetic strains by utilising advanced breeding programs.
It believes this positions it to be a leading developer and supplier of cannabis, cannabis resin, and medicinal cannabis products.
Why is Cann the one to buy?
According to Paragon Funds Management’s March update, its analysts appear confident that Cann Group is well-positioned to achieve its long-term guidance following the signing of a five-year offtake agreement with Canada’s Aurora Cannabis.
That agreement will see the C$11.5 billion cannabis giant purchase all excess cannabis-based products not required by patients in Australia and is expected to result in the company achieving total revenue of $180 million in FY 2021.
Another reason the fund manager likes Cann above its local peers Auscann Group Holdings Ltd (ASX: AC8) and Creso Pharma Ltd (ASX: CPH) is that it believes its hefty cash balance and offtake agreement means it is fully-funded to its first cash flows.
I think Paragon Funds Management makes some great points and it could be worth keeping a close eye on Cann’s progress in the coming months.
And here is another highly rated share in the cannabis industry that has been tipped for a very big future.
A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming. To the tune of an estimated $US22 billion.
Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.
Here's the best part: we think there's one ASX stock that's uniquely positioned to profit immensely from this explosive new industry... taking savvy investors along for what could be one heck of a ride.
AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.
Simply click below to learn more on how you can profit from the coming cannabis boom.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.