InvestIdeas

IBISWorld, a market research firm, projects sales of marijuana for medical use to increase to $13.4 billion in 2020 from $3.6 billion in 2015.

Companies like Cannabis Science Inc. (OTCMKTS: CBIS) and CannaGrow Holdings Inc. (OTCMKTS: CGRW) have seen shares soar 14.8% and 37% this year, respectively.

Cultivators are ramping up production and the price of marijuana is dropping, causing profit margins for growers to decline as well.

Marijuana companies — especially those that deal with the plant directly — are squeezed between the high cost of doing business and lower profit margins from the plummeting price of pot. And then there's the banking problem.

Financial institutions that do business with marijuana companies often charge exorbitant fees to offset some of the risks of dealing with these businesses, as marijuana is still federally illegal.

In the United States alone the sanctioned market for cannabis will reach $7.1 billion this year, up from $1.5 billion in 2013 – 373% growth in barely three years.

By 2020, the market for legal marijuana will top $22.8 billion.

Investment bank Ackrell Capital predicted in March that between 2016 and 2029 the market for marijuana will reach $100 billion – 1,308% growth.

In a move that USA Today described as “defining” and a “watershed industry moment,” tech giant Microsoft Corp. (Nasdaq: MSFT) revealed in June that it was dipping its toe into the legal marijuana trade.

Microsoft is getting in on the software side of the business. The company is partnering with a California startup called Kind Financial to help ensure that cannabis companies stay inside the legal lines.

Wider-spread adoption in November will bolster the already-solid bullish case for names like GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) and Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE).

The Scott’s Miracle-Gro Co. (NYSE: SMG) is going with Option 1: Embrace this fast-growing community of growers and, by doing so, “plant the seeds” for robust new paths to growth.

Scotts is already the world’s largest maker of lawn-care and gardening products, and is now making a big push into indoor plant cultivation, as evidenced by its April 2015 $150 million purchase of General Hydroponics and other pot-related acquisitions.