Congress has done little to address the issue. A group of Oregon lawmakers introduced a bill in September that would make federal disaster funding available to the cannabis industry, but it has little chance of passing in the waning days of this Congress. Separate legislation would create better access to banking — potentially allowing some small business owners to borrow money to pay for insurance or to cover losses — but it would not give farmers access to federal crop subsidies or encourage insurers to cater to the industry.

Since May, cannabis businesses from Oregon to Massachusetts have dealt with both natural and man-made disasters. As protests over racial injustice erupted across the country, so did looters — many targeting cannabis dispensaries in cities including Portland and Oakland, Calif. Then, wildfires destroyed farms and spewed ash at sensitive crops from Central California to northern Washington state. Many of the small business owners, like Haworth, are facing one or both of these crises without insurance.

Some advocates and industry leaders have called for state governments to create insurance or disaster funds for companies where there are legal marijuana markets, but no state has done so at this point. Others say the only thing that will solve this problem is federal legalization of marijuana.

Thirty-three states have legalized recreational or medical marijuana, but the federal government still lists it as a Schedule I drug under the Controlled Substances Act — a category that includes heroin and means the drug does not have any medical value and can be highly addictive.

The classification means marijuana does not qualify for any federal funding — including crop insurance or FEMA disaster assistance. And crop insurance without federal funding can be prohibitively expensive.

For most other agricultural commodities — like avocados, tea and maple syrup —

BAY CITY, MI – Bay City’s South End is one step closer to becoming the new home of a state-of-the-art marijuana growing facility that promises to bring about 100 jobs to the area.

On Monday, Oct. 5, the Bay City Commission approved an Industrial Facilities Tax Exemption Certificate application for Shango Park Bay City Inc. to allow the company to rehabilitate a vacant 24,800-square-foot building located at 1601 Garfield. The approved IFT is for the total amount of $7 million for 12 years.

Shango’s proposed plan involves turning the empty building and its 5-acre property into a mixed-use facility for marijuana cultivation, processing and storage, with the possibility for corporate offices. The existing structure will primarily be used for cultivation and offices while additions are planned to include a bakery and extraction lab.

Construction is slated to start in Fall of 2020, with the first phase of construction estimated to be wrapped up in Spring 2021.

Shango’s website refers to itself as a leading medical and recreational medical dispensary license holder, grower and manufacturer in multiple states across the country. Shango currently has facilities and sells products in Oregon, Nevada and Washington, with the plan to strengthen Michigan as a new player in its roster. Shango currently has a medical marijuana provisioning center in Lapeer but the company has larger plans for the Bay City location.

Matt Kowalski of Warren-based Shango was in attendance at Monday’s meeting to clarify details for commissioners about the tax abatement and plans for the property.

In exchange for the tax exemption, Shango plans to revamp the property and add approximately 100 new jobs of varying skill level.

“We’ll have jobs anywhere from janitorial staff all the way up to PhD’s,” said Kowalski.

In addition, Kowalski stated that the company is planning a provisioning center

If you’re a growth investor, the U.S. cannabis industry is one area you’ll want some exposure to. The U.S. pot market is going to grow at a rate of 18% per year (on average) and reach a value of $34.5 billion by 2025, according to cannabis research company BDSA. That’s more than five times the Canadian market’s projected value, which by 2025 will be worth approximately $6.1 billion. International sales are only set to climb to $6.5 billion five years from now.

Two companies that could stand to benefit from massive U.S. market growth are Trulieve Cannabis (OTC:TCNNF) and Harvest Health & Recreation (OTC:HRVSF). Trulieve recently announced its expansion into a fifth U.S. state with the acquisition of two Pennsylvania-based companies, while Harvest owns and operates over 30 retail locations across seven states. Let’s take a closer look at where these two cannabis companies are going (and where they’ve been) in order to determine which one is the better buy for cannabis investors today.

Can Trulieve’s domination continue outside of Florida?

Although its presence technically spans five states, Trulieve has achieved most of its success by focusing on its home market of Florida. On Sept. 22, the company announced the opening of its 61st dispensary and its 59th in Florida. With only two dispensary locations outside of the state, the company faces a big test with further expansion.

Marijuana leaves

Image source: Getty Images.

Trulieve’s recorded a profit in each of the past five quarters, and a big reason for that stability is its simplified business model. Many cannabis companies struggle to stay out of the red amid rapid growth. They often deploy strategies that include expansion into many different regions out of a desire to grow their presence and overall market share. 

Moving into more states will certainly boost Trulieve’s

Even before the legalization of marijuana in Canada in 2018, cannabis companies were busy investing billions of dollars in facilities to meet implausible demand projections, as well as acquiring their competitors at inflated prices. Looking back, the entire series of events placed the foundation for a catastrophe in the sector. Indeed, the Horizons Marijuana Life Sciences ETF (TSX: HMMJ), an index that tracks the performance of sector constituents, is now down nearly 80% from all-time highs. 

Now that the bubble has burst, investors have opportunities to do the previously unthinkable — buy top marijuana stocks at a great value. Today, let us look at two companies in this category and how they can reignite their momentum for long-term growth. 

Hand holding  marijuana leaf towards the sky.

Image source: Getty Images.

1. HEXO

HEXO (NYSE: HEXO) is a weed producer that grossly miscalculated the demand for marijuana but quickly improvised to overcome its headwinds. The company focuses mainly on three production aspects — high-quality cannabis (greater than 20% THC content), value brands, and mass production of low-grade cannabis to squeeze out competitors in the black market. So far, HEXO has a leading market share of 33% in Canada’s second-most populous province, Quebec.

In the first nine months of fiscal 2020, HEXO nearly doubled its gross revenue year over year, from CA$38.7 million to CA$74 million. That’s even though the company sold a mere 25,427 kilograms out of its current annual production capacity of 90,000 kilograms of cannabis in the past four quarters.

As a result of this supply-demand mismatch, HEXO recognized a massive write-off of CA$111.9 million in goodwill and CA$42 million in unsold inventory, and took CA$106.2 million worth of asset impairments in January. Such non-cash losses did not continue into the third quarter.

Right now, the company has about CA$27.3 million in long-term debt