Do you want to invest in the cannabis industry and start getting paid dividends? The market for marijuana is booming, and now is a great time to invest in lucrative cannabis companies.
When it comes to fresh, new industries like the legal weed market, dividends can be rare. After all, marijuana startup companies often need their excess capital to develop and grow their business. Fortunately, there are some cannabis companies that do pay dividends to investors.
What Are Dividends & Stock Dividends?
A dividend is a payment made to an investor by a corporation. Essentially, dividends pay shareholders back for their investment and share part of the company’s profits with them. Stock dividends are payments made to investors in the form of more shares rather than cash payments. If the company has a short supply of cash, they may choose to distribute stock dividends rather than cash dividends.
Before investing in the marijuana industry, decide which kinds of dividends, if any, are important to you. Capital appreciation may be the reason you invest rather than for divided payments. Also consider your ethics and future goals when choosing a good match. Investing will be more enjoyable if you work with a company that aligns with your values. There are lots of legal and financial considerations to make when buying stock, so professional guidance is recommended.
Cannabis Companies That Pay Dividends
AbbVie Inc. is a pharmaceutical company that manufactures the cannabis-based medication Marinol (Dronabinol). As a spin-off of Abbott Laboratories, this company offers medical marijuana-based solutions for individuals with appetite loss, nausea, or other eating disorders. AbbVie Inc. has been paying dividends every quarter to shareholders since 2013.
Altria Group is a company that manufactures tobacco products and has an investment in Cronos Group, a Canadian cannabis producer. Their dividend yield is hard to beat, averaging greater than 6.5%. Altria uses ⅔ of its cash flow to fund their operation and keep the dividends flowing for their investors.
Associated British Foods
Associated British Foods is primarily known for processing and manufacturing food, but they’re connected to the cannabis industry as well. An investment in this business is an investment in Epidiolex, a cannabis-based pharmaceutical used to treat seizure disorders like Lennox-Gastaut syndrome or Dravet syndrome.
Brown Sugar, a supplementary company of Associated British Foods, cultivates cannabis for GW Pharmaceuticals. This marijuana is used by GW Pharmaceuticals to develop Epidolex. Associated British Foods has been paying bi-yearly dividends for 18 years.
Aurora Cannabis is a Canada-based marijuana company that distributes cannabis products on an international scale. They serve customers in 22 different countries around the globe. Their wide range of products includes cannabis oils, hemp products, CBD, and more.
Aurora Cannabis completed the sale of its subsidiary company Australis Capital in November 2018. This sale contributed to a 1% single dividend to shareholders.
Compass Diversified Holdings Inc.
Compass Diversified Holdings Inc. is a corporation that acquires and manages other businesses. This company holds a majority interest in Manitoba Harvest, the world’s largest manufacturer of hemp food products. Investors in Compass Diversified Holdings Inc. saw their latest dividend of $0.36 on July 25th, 2019.
Innovative Industrial Properties Inc.
Innovative Industrial Properties Inc. is a real estate investment trust (REIT) for the medical marijuana industry. REITs generally don’t pay corporate tax if they disperse 90% of their taxable income to shareholders.
For this reason, they started paying a dividend in 2017. The shareholder will still pay the appropriate taxes on their income from the REIT.
Invictus MD Strategies
Invictus MD Strategies is a cannabis company that prides itself on providing high-quality products for medical and recreational users alike. While this company doesn’t typically pay dividends, it has paid one in the past.
Iwasaki Electric Co. Ltd.
Iwasaki Electric Co. Ltd. specializes in manufacturing lighting equipment and supplying lighting and industrial systems worldwide. Their subsidiary company, Eye Hortilux, designs, markets, and manufactures grow lights for growing cannabis indoors. The company’s annual yield for dividends is 2.04%.
Molson Coors Brewing
Molson Coors, largely known for Coors beer, has joined up with cannabis company HEXO to enter the marijuana industry. Ultimately, their plan is to create cannabis-infused beverages for the Canadian market.
Drinks derived from marijuana are a huge trend within the cannabis community, making this business venture exciting.
Scotts Miracle-Gro Company
Scotts Miracle-Gro Company focuses on manufacturing and selling lawn and garden supplies. Since they’re well-known for loving grass, it should be no surprise that they have connections to the marijuana industry. Their subsidiary company Hawthorne Gardening Company is the largest distributor of hydroponic grow products in North America. The annual dividend payout of Scotts Miracle-Gro Company is $2.32 paid quarterly.
Do You Want to Invest in the Cannabis Industry?
The marijuana market is a high growth industry with tons of potential. Choosing to invest in one of these companies can keep you in the loop about cannabis industry secrets while making you some extra cash. Whether you choose an investment that yields dividends or not is a personal choice that requires some research and consideration.
This article is not an endorsement of these companies or their stocks. Use this guide as a starting point to affordable stock options within the cannabis industry, but always do your own research. Please invest responsibly. This article does not represent the opinions of Dank or the author Philip on whether to buy, sell, or hold shares of a particular stock.