Weed Stocks: Yes? No? Maybe So?

pot stocks

A very good friend of mine asked me this week if she should invest in a cannabis company.

My answer was “I don’t know.”  Because I have no idea who the winner, or winners, will be.

Here’s an interesting piece of information…

As you may know, 2018 has been a monumental year for the legalization of marijuana.  Canada made it legal to use marijuana for recreation, as did the state of Vermont.  Beer, wine and spirits company Constellation Brands (NYSE: STZ) invested in cannabis company Canopy Growth (NYSE: CGC), and tobacco company Altria (NYSE: MO) announced on Friday that it was investing $2.4 billion in Cronos Group (NASDAQ: CRON), another pot company.  Yet the marijuana exchange traded fund (ETF) Alternative Harvest (MJ) is down 36% from its all time high.

Why is that?

Well, for starters, most if not all of these cannabis companies are losing money.  Even the well capitalized ones.  I know that their goal is to focus on growth and sacrifice profits in the short run, but I still don’t know who will end up winning.

I myself have not started a position in any cannabis company as of yet.

I will post more on this sector as time goes on, so keep tuning in!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

 

 

 

 

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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!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)