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Thinking About Buying Pot Stocks? Do This First

By Olivia Zitkus - Apr 6, 2021 at 6:10AM

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Investors have to be ready to face the ups and downs of the volatile industry.

Are Aurora Cannabis' (ACB -3.62%) cost problems too big for the business to ever reach profitability? Is a pick-and-shovel play like GrowGeneration (GRWG -3.98%) really going to give me access to all of the growth potential of the cannabis industry? For new and experienced investors alike, picking pot stocks comes with new sets of challenging questions like these.

Before you start scooping up shares of companies in the red hot sector, it's important to do your research. Dr. Chanda Macias is a medical cannabis advocate, research, and dispensary owner. Dr. Macias joined Olivia Zitkus and Corinne Cardina of the Healthcare and Cannabis Bureau on a March 19 episode of Fool Live, where she gave advice to investors looking to put their money into pot.  

Corinne Cardina: My last question is about investing because at The Motley Fool, we are investors. I would love to hear one piece of advice that you might give generally, it could be about trends, to any investors thinking about putting their money into marijuana, cannabis, pot stocks, whatever you want to call them. What might you say to investors?

Dr. Chanda Macias: I'm going to have say the same thing that I say to everyone, "You have to do your research." Cannabis is definitely a lucrative industry, but it can be volatile at different times. But my thing is that if you understand the business model that the different companies have engaged in and also know the rate of returns that they have, whether they're public or private, I think you can make an informed decision. But you definitely need to do your research and be careful you understand social equity, social justice reform, or social corporate responsibility when it comes to the cannabis industry to make sure that you're working with companies that reflect that narrative. It has definitely impacted a lot of MSOs, and they're adapting to the new way of cannabis doing good in our communities and not hurting patients anymore. So do your research, jump in if we need our investors. I'm constantly looking for investors myself. If there's any questions, feel free to reach me at, which is D-O-C-T-O-R Chanda, C-H-A-N-D-A, .com. I'm here to help out in any way necessary.

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Stocks Mentioned

Aurora Cannabis Stock Quote
Aurora Cannabis
$2.93 (-3.62%) $0.11
GrowGeneration Corp. Stock Quote
GrowGeneration Corp.
$5.06 (-3.98%) $0.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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