2 Bad Stocks Robinhood Investors Are Still Buying
These are stocks that just aren't worth the risk.
The marijuana industry is expected to triple in the next five years -- and many investors are looking to profit.
As states and entire countries decriminalize or legalize cannabis and/or its components, there are loads of opportunities for entrepreneurs and existing companies.
But as in any nascent industry, there are also loads of risks and bad actors. Whether you're a first-time investor or a seasoned veteran, it pays to understand all of the moving parts.
This guide will get you up to speed quickly.
Follow these seven steps if you're thinking about buying cannabis stocks. The following is a summary, but we encourage you to read the entire article linked below for all the details.
1. Understand the types of marijuana products.
2. Know the different types of marijuana stocks.
3. Understand the risks of investing in marijuana stocks.
4. Know what to look for in a marijuana stock.
5. Evaluate the top marijuana stocks and exchange-traded funds (ETFs).
6. Invest carefully.
7. Monitor changing industry dynamics closely.
Read more: How to Invest in Marijuana Stocks (Note: includes a list of every major marijuana stock)
We just went step-by-step through how to invest in cannabis, but just because there's a trendy new sector with lots of press and potential growth doesn't mean you need to put your hard-earned money in it. After all, if you buy broad index funds, you're covered no matter what sector of the stock market does well.
Think through the pros and cons as you read on: Should You Invest in Marijuana Stocks?
One of the biggest variables in cannabis investing is to what extent marijuana will be decriminalized or legalized within the United States, both on a state-by-state basis and on a federal basis.
The link below provides a quick spin through what we've seen so far, from decriminalization efforts starting in 1973 to legalization efforts beginning in earnest in 1996 to the political signs of where we seem to be heading.
There's been tremendous interest in Canadian cannabis stocks, because on October 17, 2018, recreational use of marijuana became legal in Canada (it had been legalized on a medical basis since 2001).
Beyond consumption by Canadians, the upside thesis involves operations or distribution to other countries that have legalized or may legalize marijuana to various extents. This includes Germany and particularly the large market on Canada's southern border.
One of the difficulties in understanding the marijuana industry is the jargon. Fortunately, it's not too complicated once you get a handle on a few main terms.
Marijuana vs. cannabis
Cannabis is the scientific name of the plant (the genus that houses three species). For an investor's purposes, marijuana is synonymous with cannabis, as are more informal nicknames like pot, weed, ganja, dope, grass, 420, sticky icky, etc.
CBD vs. THC
Cannabis is made up of nearly 500 chemical constituents, including many dozens of cannabinoids (substances that act on the body's cannabinoid receptors).
The two most commercially relevant of these cannabinoids are delta-9 tetrahydrocannabinol (THC) and cannabidiol (CBD). Only THC is psychoactive (i.e., makes you high).
Hemp is a strain of a species of cannabis with relatively low levels of THC and relatively high levels of CBD. It has many industrial uses like providing fibers to make rope and clothing.
These are stocks that just aren't worth the risk.
Which stock wins in a matchup between a leading multistate cannabis operator and the top hydroponics retail chain?
A vacillating stock market can be your friend if you have cash at the ready and a long-term mindset.
Talley Wettlaufer is a longtime veteran of both the retail and cannabis sectors.
Both are located in western Pennsylvania.
One with strong financial backing, another with consistent profits -- which of these two Canadian pot stocks is a better pick?
Young and novice investors love these high-growth opportunities.
Interested in marijuana stocks? Here are two popular players to put on your watchlist.
Investors happily greeted the news of a new C-suite hire.
The most popular cannabis stock is set to take a writedown that's twice the size of its market cap.
Yet another quarter of remarkable performance may just convince you to buy this pot stock.
There's no need to dive in and out of the market if you own stakes in game-changing businesses.
There could be a lot more smoking going on in New Jersey, Arizona, South Dakota, Montana, and Mississippi after the November vote.
Over a five-year stretch, these cannabis stocks offer a compound annual growth rate ranging between 59% and 105%.
Investors shouldn't be tempted by these terrible businesses.
Initially, the line consists of four products containing the popular substance.
Investors will want to preserve their hard-earned capital by staying away from these marijuana companies for now.
The marijuana industry's leadership carousel keeps on turning.
These two companies tell very different stories of what it's been like for cannabis stocks during the coronavirus pandemic.
The Canadian cannabis producer gave investors some good news, but there was even more bad news.