Investing in Marijuana Stocks: Should I or Should I Not?

investing in marijuana stocks

Are marijuana stocks the new Bitcoin? The marijuana business has become an intensively discussed topic since it was legalized in more states last year. More and more people are considering the idea of investing in marijuana stocks.

But what are the best marijuana stocks and what are the most important things you have to know about it before investing in marijuana stocks?

Indeed, the investment idea seems promising. Considering its continuous rise, it looks like something that might bring a fair amount of profit in the short and long run.

Many big companies and even actors and celebrities from Martha Stewart to Kathy Ireland are expressing a great interest in cannabis and its other relatives. So there is money to be made on the side of the supplier.

But having that said, is it worth a long term investment and is there enough liquidity for day trading marijuana stocks?

2018 was crucial for the history of cannabis. The state of Michigan, as well as Canada, legalized the use of recreational marijuana. The Farm Bill also passed in the U.S. Congress, legalizing hemp – which is a vital source of every CBD product (Cannabidiol).

Stocks started rising more and more, and even 2019 is a good year for many stocks. For example, CRON more than doubled its value in 2019 from ~$10 per share to currently ~$22.

Many companies producing marijuana became listed last year in the U.S. – among which were Tilray, the mentioned Cronos Group, and Aurora Cannabis.

Investors saw this as an opportunity to invest. Many millennials took the chance and considering the medical properties of marijuana, even those who were past their golden ages were able to see its promise and started investing.

As the demand for marijuana kept growing on the market, the question started: should we invest in marijuana stocks, or should we refrain from it?

Does this seem like something that has a future and will it be a worthwhile investment in the long term?

Overall, an investment might be a good idea, provided that you invest in the right company. So you have to do your homework, and you should keep a close eye on your investment at any time.

5 Interesting Marijuana Stocks

Aurora Cannabis Inc.

Aurora Cannabis Inc.‘s set on wellness – and they believe that medical cannabis should not be in any way challenging to access. This is why they commit themselves to create strains of affordable prices – all of which can be used to heal various ailments. They see themselves as influencers, and they have set themselves on the future of cannabis.

This is why they pride in state-of-the-art environments to grow their cannabis – which appeals to the investors. Granted, they may have to use a variety of expensive equipment – but in the end, the result is pure and of high quality. Their harvesting process is rather meticulous, which means that their production is also productive.

2018 was the year for Aurora Cannabis Inc. Keep a close eye on the price fluctuations. The volatility is that high that even in 2019 the stock price nearly doubled. The stock becomes interesting once a new all-time high is made. Aurora Cannabis Inc. is listed at NYSE.

Cronos Group Inc.

This geographically diversified group works with the Health Canada’s Access to Cannabis for Medical purposes, distributing it globally for those that have various ailments. Their mission is not exactly to follow the best practices – but to set their own rules that would help build the industry.

This company, like the industry itself, it relatively experimental – but also driven by the experience of the customers, as they proudly suggest. They also wish to create an iconic experience while offering value for their shareholders.

The current price per share of Cronos Group Inc. is near its all-time high. While it does seem to be over-performing over the past month, the past year showed a lot of promise for those who are interested in the market.

Considering that their philosophy is to provide valuable products to the international cannabis community, they have created a history of being a reliable operator. Cronos Group Inc. is the only stock in this list that has a solid chart without immense volatility. In 2019 the stock already doubled and is ready to make a new high soon. Cronos Group is listed at Nasdaq.

MedMen Enterprises Inc.

When MedMen started their company, they had one vision in mind: to turn cannabis into a consumer product. For this reason, their purpose is to change how marijuana is produced, cultivated and marketed.

In their eyes, the quality standard of every marijuana product is of great importance – but so are the best practices and the brand reputation. Today, the company is among the most dominant ones, managing to emerge within the industry of legal marijuana fully.
The stock price goes sideways for a while now. Investors seem to wait until the profits are increasing. In the U.S. MedMen Enterprises can be traded as OTC product.

Chances are to go from $3 to $6 are higher than going to $0. However, since there is currently not that much interest in this stock, it should be worthwhile to wait until the company announces something with a high impact.

Acreage Holdings Inc.

Having its foundation in 2015, Acreage Holdings, Inc. has perhaps one of the most diverse portfolios – particularly when it comes to cultivating, processing, and dispensing medical marijuana throughout the United States.

The company itself has formed a variety of strong partnerships with physicians, regulators, and medical researchers. Because of this, they are aiming to set a new standard for the industry – following the best practices while trying to come up with something new.

As the marijuana regulation and legislation keep evolving, Acreage Holdings tries to maintain its position high up on the market by increasing its footprint and providing affordable cannabis. They describe themselves as “aggressive yet measured” and are not afraid to take a risk when need be. While some shareholders find this to be risky behavior, others see it as leadership – and a desire to advance and improve.

In the U.S. Acreage Holdings can be traded as OTC product but never made a new high since inception. Once a new all-time high is made, keep a close eye on the stock volume and price movements.

Trulieve Cannabis Corp.

Trulieve is not only the first medical cannabis company in Florida, but it is the leading one as well. It has a “Seed to Sale” operation that has engulfed around 65% of the Florida market – which makes it obvious why it caught the attention of many investors up until now.

The company “truly believes” in increasing growth, since growth is beneficial to their investors as well as the medical patients who require their products. The company is continuously growing, and it has now purchased licenses in Massachusetts and California as well.

In the U.S. Trulieve Cannabis Corp. can be traded as OTC product but like Acreage Holdings, also Trulieve never made a new high since inception. This stock also becomes interesting once a new all-time high is made.

How to track your favorite marijuana stocks?

Tracking your stocks at any time is essential. While you can do this using your brokerage account, you also have the chance to do this with stock screeners like Finviz.

One big benefit Finviz provides is that you can use most functionalities for free. You can create watch lists, use their charting tool or track each stock by entering the stock ticker or company name right on their website.

Furthermore, there is plenty of fundamental data available to keep a close eye on the most important key figures of each company. There are many free stock screeners available. Here you find a full list of the best stock screeners:

If you consider day trading marijuana stocks, then you need to take things a bit further tracking your favorite marijuana stocks in real-time. The stock scanner Trade Ideas Pro provides real-time alerts, hundreds of filters and charting functionalities.

It depends on your personal needs and trading style which tool is most suitable for you. In any case, you should make sure that your additional costs remain as low as possible.

Summary

Aurora Cannabis Inc. and Cronos Group Inc. are the best marijuana stocks for traders and investors located in the U.S. That’s because they are listed on Nasdaq / NYSE and so better liquidity is ensured. Especially day traders should focus on stocks listed at the NYSE and Nasdaq. Otherwise, it might become difficult to open and close your position at a reasonable price.

Also, it is too early to tell whether long term investing in marijuana stocks is the best idea of the century or not, as this industry is still at its beginnings. However, no one can deny that they are gaining great potential on the market, particularly since they are becoming a crucial part of the medical industry.

As with Bitcoin, trading marijuana stocks comes with high risks but also enormous potential. But different to bitcoin, marijuana stocks are just at the beginning and have not seen price improvements of 1000% and more. Another benefit is that those stocks are listed, regulated and monitored by the authorities. Furthermore, you can analyze the fundamental data too.

A marijuana stock can be a great addition to your speculative part of your portfolio but should never reflect 100% of it.

Alexander, founder of daytradingz.com has been evaluating, testing and executing day trading strategies for more than 20 years. For him, the combination of targeted long-term investments and speculative short-term trading is the key to success.

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