Some investors believe that cannabis has the potential to divert business from the alcohol and pharmaceutical industries. The marijuana industry also points to the prospect of bigger deals with companies and nations abroad that are relaxing their marijuana laws. But should you invest in marijuana stocks? We’ve compiled some information to help you make that very decision.
Earnings growth, or the expectation of growth, is a trait of superior stocks; however, the marijuana industry is suffering losses. The industry’s billion-dollar estimations overshadow million-dollar quarterly sales figures. It’s no surprise that marijuana stocks have poor Earnings Per Share Ratings. Then there’s marijuana’s legal status. Although Canada legalized marijuana, it’s still illegal under federal U.S. law and is classified as a controlled substance without proven medical benefit. But, with about 30 states voting to make cannabis legal for medicinal use, recreational use, or both, marijuana regulation in the U.S. may be relaxing.
Whether you should invest in marijuana stocks or not depends on your tolerance for high levels of risk. How aggressive you are as an investor will ultimately determine if you are up for investing in marijuana stocks.
Marijuana Stocks to Watch
We’ve listed some of the best marijuana stocks below. You may want to invest in growers, the “plant-touching” companies, or invest in companies solely focused on the business of medical marijuana.
- Canopy Growth Corp. (CGC), a marijuana company located in Canada, is the largest publicly-traded weed company in the world. The company runs many brands, Tweed being one of the most popular. In 2019, CGC showed close to $60 million in revenue.
- Aurora Cannabis Inc. (ACB) is another industrious Canadian pot company. Aurora Cannabis acquired rival MedReleaf, which will help the new entity cut costs and gain efficiency.
- AbbVie (ABBV) is a pharmaceutical company with a FDA-approved synthetic cannabis-based drug on the market. The drug, Marinol, works to reduce nausea in chemotherapy patients and appetite loss in AIDS patients.
- KushCo Holdings (OTC:KSHB), founded in 2010, provides packaging solutions, supplies and even branding services to cannabis producers. Operating across 12 facilities in the U.S., it reported a 2018 revenue of $52.07 million.
- GrowGeneration Corp (OTC:GRWG) owns and operates specialty hydroponic and organic gardening supplies stores across six states. GRWG sells nutrients, soil, lighting, and hydroponic supplies. The company generated $29 million in 2018.
- General Cannabis Corp (OTC:CANN) is based in Denver and provides additional services to producers and businesses in the marijuana industry. These services range from real estate, consulting, and business development, to security. The company also owns a specialty cannabis lifestyle apparel line under the brand Chiefton Supply Co.
So are marijuana stocks a viable investment? Investors who have a high-risk tolerance may jump at these opportunities. Still, you should bear in mind that marijuana stocks are volatile. Although the future of the marijuana stock industry looks bright and while the marijuana industry is passing milestones, some maturation of the cannabis industry is required before tangible results are seen by investors.