Now the state of California, the most populous state in the United States, legalizes the recreational use of cannabis, and it is legally sold throughout the North American West Coast.
In 2017, the legal cannabis sales in the United States increased by 30% from the 6.7 billion US dollars in 2016 and is expected to increase by another 45% in 2018 and reach the 17 billion US dollars by 2021.
No wonder people are eager to know how to invest in marijuana stocks. But given President Donald Trump’s fight against weeds, should you consider investing in marijuana stocks?
Should you invest in marijuana stocks?
Investing in marijuana companies is not a bad idea. The cannabis stock index rose 88.8% in 2016 and 91.8% in 2017.
But before you join, you should recognize the challenge of investing in marijuana companies. In the following sections, we will describe what you need to know to determine if you want to add some greenery to your portfolio.
Jar Beginner’s Guide
If you want to invest in a marijuana company in the United States or Canada, you can choose to buy a penny stock on an OTC stock exchange, or on the Toronto Stock Exchange (TSE), Nasdaq or NYSE New York Stock Exchange (NYSE) .
Both types of stocks can also be purchased through online brokers.
Penny stocks may be cheap, but they have the risk of not knowing past performance. These stocks fluctuate so much that sudden surges in buyers or sellers can cause prices to fluctuate.
According to Troy Dayton, CEO of Arcview Group, one of the country’s first and largest cannabis angel investment groups, “In addition to cryptocurrency, other industries have not changed as rapidly or unevenly as the cannabis sector at all.” : “New Report 2017: Legal Cannabis Sales Increased by 33% to $10 Billion in 2017”, GlobeNewsWire, December 6, 2017.)
Your investment may cause a pot of gold or end the smoke.
When Jason Spatafora, known as “Wolf of the Weed Street,” began investing in 2013, he set foot in low-priced stocks. He purchased 10,000 shares of marijuana at a price of $500.00. Two days later, the value of the stock rose by 50%. Two days later, the stock was once ups and downs.
Since the hemp penny stock is very cheap, people may be forgiven for neglecting the instability of the cannabis industry. However, once it is entered, it requires due diligence.
You must remember that although 29 states in the United States have legalized medical marijuana, 8 of them (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington) also make recreational use Legalization, but according to U.S. federal law, marijuana is still illegal.
With Uncle Sam frowning on marijuana, most banks are reluctant to provide loans to marijuana companies. Therefore, the first thing to confirm is to invest in the legal industry of the cannabis industry.
Many U.S. investors send dollars north of the border because Canadian marijuana in July will be completely legal. But you don’t need to go too far.
Don’t invest in weeds to make money
You can kill a lot from the hemp industry by investing in support companies that don’t grow weeds or deal with a lot of overhead or federal repressive threats.
The Kush Bottle Company (OTCMKTS: KSHB) is an example. They just do weed packing.
Other subsidiary companies manufacture evaporators, irrigation lines or software. These companies may be the best way to invest in marijuana stocks and remain the right direction for the law.
However, if you are keen to invest in core marijuana stocks, it is best to spend some time choosing between medical marijuana stocks and casual marijuana stocks. Then, when you make a decision, the next step is to figure out how to invest in medical marijuana or how to invest in recreational marijuana.
There is also a third option, cannabis producer stock, which allows you to do this (although this is not strictly legal in the United States).
Medical marijuana stocks
Biotechnology is a major part of the cannabis industry. Like GW Pharmaceuticals PLC-ADR (NASDAQ: GWPH), Cara Therapeutics Inc (NASDAQ: CARA), AbbVie Inc (NYSE: ABBV), Zynerba Pharmaceuticals Inc (NASDAQ: ZYNE) and Insys Therapeutics Inc (Nasdaq: INSY) Using endocanbinoids to treat cancer and other diseases such as epilepsy pain.
There are more than 90 registered companies in Canada that produce weeds purely for medical purposes.
Although all these companies have potential, some of them, such as Insys, actually lobby against cannabis. Insys launched the drug “OxyContin,” and the rapid increase in legal cannabis may hurt sales of OxyContin.
2017 Best Cannabis Stocks
You can profit from the cannabis stocks just as you saw in the 2017 Best Cannabis Stocks List.
Village Farms International Inc (TSE:VFF): Stock Price Rises 414.2%
Emerald Health Therapeutics Inc (CVE:EMH): Stock Price Rises 299.8%
Aurora Cannabis Inc (OTCMKTS:ACBFF,TSE:ACB): Stock Price Rises 221.5%
Kronos Group Corporation (Nasdaq: CRON): Stock price rose 214.8%
Aphria Inc (OTCMKTS:APHQF,TSE:APH): Stock Price Rises 206%
Canopy Growth Corp(OTCMKTS:TWMJF,TSE:WEED): Stocks up 150%
Arena Pharmaceuticals (Nasdaq: ARNA): Stock Price Rises by 119%
Cannabis Producer Stocks
When Colorado first legalized the sale of marijuana, you may have heard about the producers of cannabis. At the time, medical marijuana had been legalized, and when marijuana’s opportunities for recreation appeared, medical marijuana companies thought it would be a good idea to kill two birds in the way of one stone and two birds.
Although they were only allowed to sell marijuana for medical purposes, they decided to extend the cost of their licenses and favored the entertainment market. In a few months, there are a large number of pharmacies that are doing what they should not do: selling marijuana for recreational purposes.
These cannabis producer stocks are the most widely known of the cannabis stocks, and there are good reasons for them: they have already made a lot of money. But that was during the reign of Barack Obama.
With Trump and his Attorney General Jeff Sessions cannabis, cannabis producer stocks have been closely scrutinized, and their game may be very unsuccessful.
What is a weed mutual fund?
There is no cannabis mutual fund, but there are two exchange-traded funds (ETFs): the Horizo ns Marijuana Life Science Index ETF (TSE:HMMJ) and the ETFMG Alternative Harvest ETF (NYSEARCA:MJ).
Although both cannabis ETFs have now been traded for some time, I think this may be a better option. It holds shares of more than 25 companies and has gained 121% since its inception in April 2017.
However, keep in mind that most of these 25 companies focus on Canada. For those who want to reach the US market, there is no ETF choice (so far).
Is this the right time to jump into marijuana?
On January 4th, 2018, Sessin’s Attorney General put aside a memorandum of the previous federal government that allowed the states to determine their own policy of prosecuting cannabis.
Although this has made the Cannabis revolution a wrench, experts say this does not mean that this is a bad investment opportunity. Their view is that most of the legal investment opportunities currently exist in Canada, and Canada is opening its doors to legitimate weeds.
Then by investing in companies related to marijuana, the production or sale of marijuana itself is another way out.
I think now is actually a good time to invest in marijuana stocks because prices have fallen slightly in the past few months. Moreover, as U.S. states oppose the federal government’s position on marijuana, share prices may continue to climb.