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Are There Any Good Marijuana Stocks?

In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool analysts Jason Moser and Brendan Mathews take a question from a reader who asks, "I believe marijuana is going to made legal in most states. Is the Motley Fool looking at any of these stocks?"

According to Brendan, there are no large, reputable, publicly traded companies that will directly benefit from the recent reforms in marijuana laws made by Colorado and Washington. Of course, this is a well-publicized issue, and there is no shortage of penny stock promoters have surfaced to capitalize on the hype (and take advantage of individual investors).

Unfortunately, a large number of penny stocks and micro-cap stocks tend to work out badly for investors. Many of them have limited business operations, and their "potential" is just hype generated by unscrupulous promoters. Thus, Brendan and Jason suggest treading with caution -- or bet yet, avoid investing in any marijuana-related penny stocks. Investing in penny stocks (whether related to marijuana or not) is the most sure-fire way to lose money in the market.

Don't risk it with penny stocks, when there's great growth to be had elsewhere.
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Read/Post Comments (4) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 22, 2014, at 1:55 PM, Remix20 wrote:

    The sector includes over 100 tickers right now. There are a few very interesting companies that many people are considering the better prospects in the space.

  • Report this Comment On March 22, 2014, at 2:03 PM, Bman555 wrote:

    This kind of thinking is not any different than when Decca rejected the Beatles at their audition and said,

    "Guitar groups are on their way out, Mr. Epstein"

    Look how much money Decca lost on that thinking...

    I personally have made over 700% on my money in Marijuana penny stocks and have identified good companies. Matter of fact one is going public shortly on the TSX. You DO have to do research however or you will get burned.

  • Report this Comment On March 24, 2014, at 12:21 AM, SELLmtg wrote:

    My opinion: Buy PMCM ( a marijuana co. that owns a marijuana store in Seattle, WA (, news 3/19). PMCM=0.0025 ( as of 3/21) and will go up higher. WA is 1 of the 2 states that legalized marijuana. PMCM is the only public company that owns a marijuana store in WA. PMCM does file with the SEC (news 3/21) and this is good.

  • Report this Comment On March 31, 2014, at 2:34 PM, terrell1951 wrote:

    I really wish that Brendan would have done more reseach before writing this article. He does not back up his article with any facts what so ever.

    I hope he will do more research before he writes his next article.

    This article is very misleading, I started buying and still hold MJ stocks from over a year ago! I am not a day trading flipper! I'm looking long term!

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Brendan Mathews

A Fool since 2005, Brendan is a research analyst on The Motley Fool's Stock Advisor newsletter. He enjoys scouring financial statements, pontificating on competitive advantage, and any outdoor activity.

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