Marijuana stocks have seen quite the ups and downs over the past few months. In that time, company values have begun to rise along with future projections for the pot stock market. With so many options to choose from cannabis stocks seem to be ripe with opportunity. With great power, however, comes great responsibility.

This responsibility comes in the form of research. Investors need to ensure that they have done all the research possible before investing in a given company. If they are able figure out all the numbers pot stocks to watch can potentially become pot stocks to buy.

In the end, it all comes down to personal preference and what the data says about a given company. Aside from knowledge about a particular marijuana stock, one must also know their specific investor style. With all this in mind, there are many pot stocks to watch moving forward.

A Growth Oriented Pot Stock to Watch

AgraFlora Organics (AGRA Stock Report) (PUFXF Stock Report) is one of the leading diversified cannabis companies currently focused on both the domestic and international marijuana markets. The company has a large indoor cultivation facility based out of London, ON. In addition to this, they are also a joint venture partner with Propagation Service Canada for a very large-scale 2.2 million square foot greenhouse complex based in Delta, BC.

Because of this, they have quite a large amount of potential for growing big quantities of marijuana. One of the main claims to fame for AgraFlora Organics has been their successful track record of increasing shareholder value. In addition, they have also stated that they are working heavily to pursue a variety of opportunities throughout the cannabis industry. With this in mind, they remain a key pot stock to watch.

Big News for AgraFlora Organics

The company recently announced that they have provided guidance for a new integration method of their proprietary cannabinoid formulations library as well as their manufacturing process. They will do this at their fully operational Toronto, ON facility. With this update, they have stated that they will be able to provide almost 100% accuracy for THC potency results through a ISO-certified lab based out of Colorado.

Additionally, they have been working to have support for their proprietary micro-diffusion technologies, which will help to optimize bioavailability and solubility for their varying cannabinoid-infused products. AgraFlora Organics’ commitment to innovation continues to put them at the top of cannabis stocks to watch moving forward.

A REIT Pot Stock to Watch

Innovative Industrial Properties (IIPR Stock Report)  is arguably the most famous REIT in the marijuana stock market. The company operates by purchasing and then leasing out facilities for those who wish to grow cannabis. Because they have managed to lease out all of their owned spaces, the company has remained consistently profitable.

The last week or so has quite the amount of growth which has attracted a large amount of investor attention. One of the key things to note is that they also provide a return for investors in the form of a dividend. All of this adds up to a very interesting marijuana stock to watch for the future of the ancillary cannabis market.

Few in the cannabis community would argue the fact that one of the biggest stories in the movement in the last 5 years was the legalization of adult-use marijuana in Canada. The first large, developed country to legalize on a federal level, Canada was poised to set the tone for legalization around the world.

But, as I feared, Canada’s government has created an industry that is so restricted it has no hope of competing with the black market. Restrictions have created supply issues which have, in turn, kept prices high.

This is an issue I have addressed several times on our video news show Cannabis News, and it’s an issue that stems from two major problems with implementing legalization. Many lawmakers, politicians and bureaucrats hold the belief that cannabis is a dangerous substance that must be restricted and regulated, and plans need to be made for every possible contingency, even ones that could never come to be. This causes them to be overly cautious, often to the point that they cripple the legal industry before it can even get off the ground.

The second problem is that not enough lawmakers, politicians and bureaucrats believe that the more choice cannabis consumers have, the better the legal industry will function and the sooner the black market will be undercut and crippled. More supply leads to more choice for consumers which leads to lower prices which leads to more consumers coming over to the legal industry.

Instead of treating cannabis like it’s something people need to be protected from, it should be treated like something people want to buy. And while the argument rages between those who think cannabis should be treated like poison and those who think it should be treated like lettuce, many of us would settle for it being treated like alcohol.

Sure, alcohol is regulated, but there are also at least a dozen places within 5 miles of my house where I can buy alcohol, and this doesn’t count bars. I can go to any Kroger grocery store and find dozens of different kinds of alcohol, all reasonably priced. I can have a bottle of Everclear in my hands in less than 15 minutes, no matter which direction I drive. I can buy several bottles of liquor and a few cases of beer and no one will give me a second look. 

Canada’s legalization rollout suffers from these two problems, leaving supply in the country restricted and the black market wholly intact. 

“NORML Canada’s view on legalization is that it is a huge step forward for Canadians,” Andy Lee, Communications Director for NORML Canada, told The Marijuana Times. “To be able to legally purchase and consume cannabis is a freedom Canadians should have been afforded all these years. The actual roll-out of legalization however is a different matter. The current legal framework has created a monopoly market that benefits large corporate Licensed Providers, and leaves little to no pathways for small cannabis entrepreneurs to become part of the legal market. Because of this, LP’s on their own are unable to meet supply/demand and offer competitive quality/pricing to effectively stamp out the illicit market.”

The key to legalization is allowing the maximum amount of participants. The lowest possible barriers for entry into the industry will maximize choice and supply and benefit every cannabis consumer. It will create the most jobs and the biggest possible economic impact while driving illegal dealers out of business.

As much as many hate to hear it, cannabis is a commodity, subject to all of the economic laws that affect every other commodity and service.

On the one-year anniversary of adult-use legalization in Canada, other forms of cannabis are supposed to be allowed for sale, but many are skeptical that rollout will be any smoother. “Regarding edibles, concentrates, and topicals slated for Oct 17th, 2019, many industry experts have predicted that there will be supply issues with demand far outstripping available product,” Andy told us. “This will mirror the initial rollout of legalization Oct 17th, 2018 with dried flower. The likelihood is that only a handful of LP’s will have product for sale come Oct 17th, but will be sold out immediately, for many months.”

The legal cannabis industry needs to be unleashed if it is to ever get a foothold, no matter what country we are talking about. Hopefully lawmakers in Canada learn that lesson before they do too much lasting damage to the industry’s ability to compete with the black market.

The World Health Organization made waves earlier this year by publishing its first marijuana review. The WHO had lots to say, including a call to place cannabis in a less restrictive schedule of the 1961 United Nations Single Convention on Narcotic Drugs.

It might not seem like it, but bureaucrats in Washington, D.C., actually want to know what Americans think about the WHO's recommendation. More specifically, the Food and Drug Administration has reopened the comment period regarding the WHO's rescheduling recommendation, along with other marijuana legalization issues.

In spring, the FDA's request for feedback received 1,939 comments, but the agency postponed voting on cannabis-related recommendations until a later date. The agency recently reopened the feedback channel and will keep it open until Sept. 30.

The agency will probably hold a cannabis rescheduling vote shortly after closing the door on comments again. If you're holding cannabis stocks but aren't quite sure what to expect, there are at least four things you need to understand about the FDA's attitude toward cannabis and the agency's role in this burgeoning industry. 

1. The status quo

The Comprehensive Drug Abuse Prevention and Control Act of 1970 created five schedules, with different levels of control. Marijuana was placed in Schedule I, the most restrictive, early on, and it's still there, with some minor exceptions.

There have been a few drug approvals for products that contain synthetic THC, the cannabinoid that gets people high, but they haven't been very successful. Although it's difficult to prove, THC seems far less tolerable and less effective when administered without its usual entourage of cannabinoids and other components. 

More recently, the FDA approved the marijuana-derived cannabidiol (CBD) tincture called Epidiolex from GW Pharmaceuticals (NASDAQ:GWPH). If you haven't heard, CBD is the non-intoxicating cannabinoid that seems to reduce inflammation, surface pain, and insomnia without an intoxicating effect. The FDA gave Epidiolex approval to treat severe forms of childhood epilepsy only after the company proved it was safe and effective in a series of clinical trials.

Epidiolex is officially approved to treat severe epilepsy, and that's it so far. Trying to market it to any other patient group is expressly forbidden. It's also important to note that there are hundreds of different CBD brands, but Epidiolex is the only one that can claim to have any medical benefits whatsoever. 

2. The FDA doesn't mess around

In July, America's largest vertically integrated cannabis company, Curaleaf (OTC:CURLF), received a lengthy warning letter from the FDA that threatened an unlimited seizure of property and closure of facilities. The agency gave the company 15 days to produce a plan, or an argument, to address violations of the Food, Drug, and Cosmetic Act.

A warning letter from the FDA isn't the same as a congressional subpoena. The agency can, and often does, shut down non-compliant operations like a boss.

Curaleaf was marketing its CBD products as dietary supplements, which isn't going to work for anyone. One incontrovertible reason has to do with the recent approval of Epidiolex. Since CBD is an active ingredient in an FDA-approved drug, anything containing CBD can't be a dietary supplement.

Previous FDA approvals of dronabinol-based therapies probably mean THC-containing products won't be marketable as dietary supplements either. That means legalization of marijuana won't allow Curaleaf, or its peers, to mention the perceived health benefits consumers or their pets might receive from any THC-containing products.

While Curaleaf tried to pretend its products were dietary supplements to avoid regulation, CV Sciences (OTC:CVSI) is taking a halfway approach. This June, CV Sciences boasted about a successful study with real people that were split into random groups that received a placebo or the company's PlusCBD Oil. Patients given CV Sciences' capsules were significantly more likely to report improvements in sleep quality than those given capsules full of olive oil. 

3. The right way forward is long and expensive

Despite convincing evidence from a clinical trial, CV Sciences won't be sending the FDA an application to market PlusCBD Oil as a sleep aid in the foreseeable future. That's because the company would need to spend money it doesn't have to assemble mountains of data from a long list of sources, including lengthy safety studies with a variety of animals before applying to begin trials with humans. That's a big reason GW Pharmaceuticals spends at least $100 million each year on research and development and CV Sciences is still in a seven-digit zone.  

The FDA's approval of Epidiolex was preceded by several approvals of drugs containing synthetic THC, but so far, the agency hasn't even reviewed a product with THC from the plant itself. Once you see Curaleaf or one of its peers mention an investigational new drug application, then you'll know they're serious about trying to market cannabis products as medicine.

4. Not the only decider

Unfortunately for cannabis companies that aren't focused on CBD, the Drug Enforcement Administration is responsible for setting controlled substance schedules. Determining a substance's potential effects isn't exactly within the DEA's purview, so it depends on the FDA for help choosing appropriate schedule positions for each drug.

It probably seemed like a good idea at the time, but the process creates a Catch-22 for THC-containing cannabis research, because as a Schedule I substance, it's nearly impossible to conduct meaningful research on cannabis products. The DEA provides academic researchers with well-understood cannabis strains from preordained sources that help them get around Schedule I rules, but there still isn't a clear process that will allow companies to run FDA-compliant clinical trials with their own products.

What to expect

In 2016, the DEA would have rescheduled cannabis if the FDA had given the green light. Since Schedule I restrictions have severely limited cannabis research, the agency refused to issue an opinion until it has more measurements related to potential safety issues and habit formation to base an opinion on.

While it seems as if the DEA, the cannabis industry, and the FDA are stuck together in a neverending bureaucratic nightmare, the DEA recently took steps to register additional marijuana growers. In January, there were 542 scientists registered by the DEA to conduct marijuana research. That's not a lot, but it's 40% more than there were two years earlier.

The odds that the FDA will consider research conducted over the past few years sufficient to place cannabis in a less restrictive schedule aren't great, but they're a lot better than they were a few years ago.

Hopes for a more liberal approach to cannabis regulations from the Boris Johnson Government have risen with the appointment of two cannabis supporters to his team.

Blair Gibbs, former Policy Lead at the Centre for Medicinal Cannabis, who worked with the new Prime Minister when he was Mayor of London, has joined the No 10 Downing Street policy team. Where he will be working with fellow cannabis supporter Danny Kruger, the Prime Minister’s new Political Secretary, who has also called for an end to the prohibition of cannabis.

Tough Stance on Drugs

While the new PM says he enjoyed cannabis in his younger days he has since gone on to take a firm stance against decriminalization of most drugs.One of Mr Gibbs initial tasks may be to focus on establishing clearer regulations for the U.K. CBD industry which currently operates in a regulatory lacuna.

And, secondly, the frustrating situation where raw ingredient CBD – for use in all British retail CBD products – has to to be imported into the U.K.

CBD Regulations On The ‘To Do’ List?

In a recent interview with CBD Testers he expressed his irritation: “We have the perverse situation where farmers must pay the Home Office – the national security department of the British state – for a licence to grow hemp from a list of approved hemp seeds all of which have guarantees to certify they will produce no more than 0.2% THC.

“Once licensed, however, they are mandated to remove and destroy the most valuable part of the plant. That isn’t sustainable, and explains why the U.K. hemp sector is so small in stark contrast to the boom on the Continent. In practical terms there is nothing more radical that needs to happen than DEFRA and the Home Office jointly agreeing changes to the licensing conditions for hemp. A small change at a stroke would give the U.K. the ability to have a domestic hemp industry supplying CBD in to the U.K.”

At the CMC, Blair Gibbs worked with Government on devising clearer guidelines for the CBD industry telling CBD Testers we need to encourage the ‘the adoption of a credible and robust system of voluntarily self-regulation’ for the sector. He said: “I’m, not sue we quite have that yet.”

The Victorians Did Not Ban Everything

Having lived in Canada he is said to favor the Canadian Government’s legalization route recently posting the following on twitter. “When the UK gets round to legislating to regulate a legal market for recreational cannabis it will need to learn from other models but also devise one that fits its own culture and institutions best.”

Mr Kruger is a former speech wirier for ex-Prime Minister David Cameron, and in 2017 said: “We do not need to ban everything bad. After all the Victorians never prohibited alcohol.” Earlier this year CBD Testers reported how the British public is now in favor of cannabis legalization and some politicians believe it could happen within five years.