Marijuana is going to be big business. According to research firm Cowen Inc, the cannabis market should hit $75 billion in sales by 2030, up from $50 billion in 2026. Few markets are growing faster or have as much promise as legalized pot. Yet there are some opportunities that will be bigger than marijuana.
Take a look at the largest companies in the world and you’ll notice one thing: technology is really the driving force here. The world’s biggest giants aren’t resource companies like Exxon Mobil Corporation or consumer brands like Procter & Gamble Co. Instead, they’re tech firms like Apple Inc., Microsoft Corporation, and Alphabet Inc, each of which is bigger than Exxon and Proctor & Gamble combined.
Cannabis is already a multi-billion dollar opportunity, but new tech innovations are often multi-trillion dollar opportunities.
While it may take some time for the following markets to mature, all three stand a promising chance at outperforming the marijuana market.
The commercial drone market is already worth $14 billion, but the use cases are still fairly narrow. They’re often used in the military, film, and security industries, but in the future, there should be huge opportunities for medical and commerce applications.
Already, drones are being used to delivery blood to remote communities in Rwanda. More than 20,000 lives have been saved via drone delivery. Yet Rwanda represents just 0.2% of the world’s population. Opportunities in higher population countries like the U.S. and China could cause the commercial drone market to skyrocket. By 2024, the market value is expected to exceed $40 billion, eclipsing the cannabis market’s growth.
While there aren’t a ton of investable opportunities, Drone Delivery Canada Corp (TSXV:FLT) looks like a great option. As its name suggests, the company is focused on delivering mission-critical supplies throughout regions of Canada. The company could find big success in remote communities, oil and gas applications, and time-sensitive delivery needs.
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The future is modular, or at least that’s what Horizon North Logistics Inc. (TSX:HNL) is betting on. The prefabricated housing market is expected to surpass $20 billion by 2024, and depending on initial success, could scale significantly larger. That’s because pre-fabricated modular homes, like the ones Horizon North manufactures, are cheaper and faster to produce, helping solve North America’s need for more affordable housing.
Horizon North’s market valuation is now under $200 million, pricing in very little long-term upside or industry growth. The share price has been hurt by weakness in the energy sector, but the long-term story should be commercial and residential.
For example, it recently began construction on a five-story modular Marriott Fairfield Inn & Suites in British Columbia. Of all the stocks on this list, Horizon North requires the most patience, but the rock-bottom valuation may be worth the risk.
E-commerce takes flight
This is the biggest market opportunity on this list: e-commerce. You likely already shop online regularly, but whether or not you’ve realized it, the industry has been going through a transformation.
In the past, it was expensive and complicated to build an e-commerce business. It required a large upfront capital investment for web design, hosting, manufacturer contracting, inventory warehousing, and shipping and fulfillment. Even marketing required millions of dollars for TV or radio advertising.
Today, the equation has been reversed. With platforms like Shopify Inc (TSX:SHOP)(NYSE:SHOP), anyone in the world can launch an e-commerce business in minutes, complete with integrated tools to automate every part of the company. Tech applications are changing the game for commerce, shifting power from large corporations to individual entrepreneurs.
Entrepreneurial e-commerce platforms are growing four times faster than the e-commerce industry as a whole. For example, e-commerce sales are set to reach $585 billion in 2019, an increase of 14% versus the year before.
Shopify, meanwhile, just hit $1 billion in sales, a 50% increase over the year before. This looks like the biggest tech opportunity of the decade, and your best bet is to find the next Shopify.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), and Apple. Tom Gardner owns shares of Alphabet (A shares), Alphabet (C shares), and Shopify. The Motley Fool owns shares of Alphabet (A shares), Alphabet (C shares), Apple, Microsoft, Shopify, and Shopify. The Motley Fool is short shares of Procter & Gamble and has the following options: short January 2020 $155 calls on Apple, long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, long January 2020 $150 calls on Apple, and long January 2021 $85 calls on Microsoft. Shopify is a recommendation of Stock Advisor.
Fool contributor Ryan Vanzo has no position in any stocks mentioned.