Cannabis Stocks: Can Investing On Cannabis Pay Off?
Cannabis Stocks: Can Investing On Cannabis Pay Off?
If you view yourself as a future Thurston Howell that enjoys investing and learning about the stock market, there are probably a few industries that are interesting to you at the moment. Of course, there is the tech field where if you guess on the right stocks, you could become a millionaire rather quickly.
Then there is the medical field where there is always the chance that you could invest in the company that comes away with a cure for some major disease, netting you millions in the process. Or you can go in the opposite direction and invest your money in a new industry that is booming in many parts of the world.
The cannabis industry offers an opportunity right now to get in on the ground floor.
The Cannabis Stock Boom
Looking back, there were signs that the cannabis industry was about ready to explode on us. Marijuana used to be looked at as an illegal drug that could turn even the sanest people crazy. It was lumped into a category with such harmful drugs as cocaine and meth. However, by the mid-2000s, the public opinion had started to change on cannabis.
One poll by Gallup back then showed that one-third of all Americans were in favor of legalizing marijuana across the country. Just that news alone was a bit astounding for many. But now, in 2018, two out of three Americans are now in favor of legalizing marijuana.
In fact, 32 states have made medical marijuana legal, 10 states have made it legal to use marijuana recreationally, and more seem to be ready to hop on board. If that wasn’t enough, our neighbors to the north in Canada have legalized recreational use of marijuana for all adults.
With this in mind, the cannabis stock boom is here. Everyone is trying to find the right cannabis company to invest in as there seem to be new ones sprouting up on a weekly basis. Some weed stocks have risen 30 to 40 percent already while there have been a few that have grown 300 percent in the last few months.
As more and more regions around the globe are legalizing weed, you can count on the stocks to continue to improve. In less than 10 years, the marijuana industry is predicted to reach almost $60 billion.
The History of Marijuana and Hemp Stocks
When considering which stocks and industries to invest in, you always want to take a look and see how they have done in the past. However, with marijuana and hemp stocks, this is hard to do as they are just really legally arriving on the scene in the last couple of years.
Plus, investors are becoming confused about the differences between cannabis, marijuana, and hemp.
People often toss around terms like hemp, marijuana, and cannabis without knowing there is a difference between the three. Cannabis is a family of plants. Hemp and marijuana are both from this plant family, but they are used for sometimes very different things.
Hemp contains a very low THC level at about 0.3 percent (the ingredient that provides a high to the user), while marijuana has a THC level of anywhere from about 15 to 40 percent. Because of this, hemp is mainly used for industrial purposes like paper, clothing, and even oil, and marijuana is used for recreation and medical purposes.
Investing in Cannabis Stocks
Now that you know the difference between the three terms, if you are investing in a cannabis stock, then you are investing in either marijuana, hemp, or both. However, make sure you do your research to determine exactly what you are putting your money in.
If the company you are investing in is producing both hemp products and marijuana items, think of this as a diversification of the stock. You are covering your bases if hemp does poorly, then marijuana could make up the difference or vice versa. In any case, you have a decision to make.
Do you want to buy a popular marijuana stock that has already risen 200 percent and maybe is all tapped out or do you want to take a chance on one just hitting the market for pennies?
Where to Get Your Cannabis Stocks News
There are numerous websites where you can keep track of cannabis stock news. Investor’s Business Daily is a good one that will not only make you aware of how your cannabis stocks are doing, but will also provide you tips on stocks for other industries.
Cannabis Stocks to Buy
This should be your main question right now. What cannabis stocks should I buy at this moment? You have all the information you need, but now you want actual names of the stocks to invest in. We will focus on the marijuana stocks first and ease our way into a couple promising hemp stocks as well.
Medicinal Cannabis Stocks
With many more states legalizing medicinal marijuana than recreational marijuana, it could make sense to invest in a few medicinal marijuana stocks at this moment. In addition, Canada is the number one country for medical marijuana use, but they are actually followed closely by Germany.
In the next four years, the global medical marijuana market is projected to more than double from 2018 levels, according to estimates from ArcView Market Research and BDS Analytics. Here are a few top choices to invest in now so you can ride the good fortune into the future.
Canopy Growth is the largest marijuana producer in the entire world by market capitalization. The company continues to invest in building its operating platform and in expanding, and because of this, they aren’t always profitable every month. But it is just a matter of time before Canopy Growth has everything in place and the stocks will rise.
Liberty Health Sciences is a medical marijuana supplier that has its headquarters in Canada but has most of its operations located in Florida. While it is currently having problems staying profitable, it is set to grow its business.
Florida is due to have the largest medical marijuana market in the United States.
By the year 2022, ArcView Market Research and BDS Analytics predict that the state’s medical marijuana sales will be close to $2 billion in about three years. Liberty Health Sciences will have ringside tickets to this explosion and should profit from it.
Recreational Cannabis Stocks
One stock that did fairly well in 2018 in the recreational marijuana market is CannTrust Holdings Inc. They introduced three different brands to their customers for their grand opening. They also provide medical marijuana, but with these three new brands, they are expanding to all sides of the marijuana business.
If you are looking at a bit more diversity in your recreational marijuana stocks, might as well go for the people that want to grow their own pot at home. Scotts Miracle-Gro has entered the arena by trying to become the go-to provider of the products you need to grow marijuana at home.
It is an interesting strategy as the company does not produce the actual marijuana, but they do provide the material to do so. And if you aren’t positive that you want to invest in a company that solely is producing marijuana, Scotts Miracle-Gro does much more. They are present in all home gardening aspects, so your investment should be safe.
Cannabis Penny Stocks to Buy
Penny stocks are often referred to like stocks that usually trade at a maximum of $5. There are still deals to be found where you can invest in marijuana stocks at around a dollar each.
MPX Bioceutical (MPXEF) specializes in medical grade cannabis and they have jumped into the field of marijuana products that don’t require smoking. They have shown a nice growth rate though and could produce some good results for your portfolio.
Supreme Cannabis Company (SPRWF) could be a low-risk high reward stock in the near future. Canada has the most marijuana penny stocks available, and Supreme is near the top of the heap. It is considered the gold standard of cannabis production, so throwing a few dollars in for some shares might not be the worst thing you do today.
Industrial Hemp Stocks
Don’t forget the industrial hemp stocks either. Global Hemp Group is currently trading at about a dollar a share. Based out of Canada, they are involved in hemp cultivation projects a few regions around the globe. Global Hemp’s next step is predicted to be into the medicinal CBD territory.
Hempco Food and Fiber is a producer and distributor of hemp-based products produced in their facility in Canada. They are trading at about a dollar a share as well and with hemp being used for more and more purposes, it could pay off for you in the end.
Will Cannabis Stocks Be Your Lucky Break?
Talking with your financial advisor, you may be met with a bit of disdain when discussing marijuana stocks. Don’t let that deter you. There are several people reaping the benefits of their cannabis investments. The key is to choose wisely.
n fact, it might be best not to leave the choice up to the financial advisor. There seem to be a few clueless moneymen out there in regards to marijuana stocks. However, as more regions around the globe legalize it, it will be a hot commodity.