Should I Buy Marijuana Stocks?

Marijuana stocks have been on fire lately!

Three in particular – Canopy Growth (NYSE: CGC), Cronos (NASDAQ: CRON), and Tilray (NASDAQ: TLRY).

I was recently asked by someone if I thought they should invest in marijuana stocks.  My initial answer to that question is “With extreme caution and the ability to stomach volatility.”

The legal cannabis industry is expected to grow from $10 billion in 2017 to $24.5 billion by 2021.

At the moment, Canopy Growth is the clear cut leader.  They are the largest medicinal grower of cannabis in the world, with a market cap of $11 billion.  Constellation Brands (NYSE: STZ), one of the largest alcoholic beverage companies in the world, has invested $4 billion to acquire a 35% stake in the company.

Canopy Growth has a huge medicinal business.   They have aspirations to become a global brand.

It is very early in the game; each of these three companies maybe considerably overvalued.  We may even be in a cannabis bubble.

That doesn’t mean that these stocks won’t go higher, though!

I don’t presently own any cannabis stocks.  If I had to buy one, it would be Canopy Growth.  They are the leader of the pack, and they have the backing of a $35 billion  company like Constellation Brands.

Until tomorrow, everyone!

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