As marijuana legalization spreads, investors are quickly piling into cannabis-cultivating businesses like Aurora Cannabis Inc. (TSE: ACB) and Canopy Growth Corp (TSE: WEED; NYSE: CGC) to grow their green portfolio. Before piling all your cash in cannabis growers, keep in mind there are at least half a dozen industries that stand to benefit from the marijuana boom. Chief among them is technology, which offers both direct and indirect plays into the cannabis ecosystem.
Below are two tech companies that are already benefiting from legalization and stand to reap the benefits of a rapidly expanding market.
Shopify Inc. (NYSE: SHOP)
If Canada is the centre of the marijuana boom, Shopify (NYSE: SHOP) is the leading Canadian e-commerce company helping weed businesses grow their online presence. Shopify has quickly scaled to become a multinational corporation and is poised to become the middleman for the marijuana sector.
Shopify has already partnered with the Ontario Liquor Control Board to integrate cloud services at brick-and-mortar locations. The company is also helping the vice regulator expand its online and mobile presence.
With respect to cannabis, the company is already working with some of the industry’s largest pot growers, including the aforementioned Canopy and Aurora. Combined, the two companies generate more than a third of all marijuana produced in Canada.
In terms of share performance, Shopify has mirrored the broader technology industry over the past six months. This includes a brutal decline in the fourth quarter followed by a meteoric recovery so far this year. The company is currently trading near record highs and boasts a market cap of $20.7 billion.
Helix TCS Inc. (HLIX)
Helix TCS (OTCMKTS: HLIX) is another emerging technology company focused on bringing the cannabis industry mainstream. Helix operates five brands across three core service areas: technology, compliance, and security. This includes a “comprehensive seed-to-sale platform for licensed cannabis businesses.”
At its core, Helix helps weed growers remain compliant at each stage of their business cycle. This includes on-site surveillance and security, logistics and other supply-chain services. The company has developed a software called BiTrackTHC, which helps licensed growers and governments monitor the cannabis supply chain. Over 2,200 customers across 32 states and five countries have already signed up for the services. Nine government contracts have also been awarded to the company.
HLIX shares have tripled since the start of the year, bringing the total market cap to around $200 million. At just $2.72, the stock is dirt cheap for the services rendered.