Stock Markets Rebound as Amazon Chases Peloton; High Hopes for Aurora Cannabis
Some gains for key indexes were overdue.
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.
Some gains for key indexes were overdue.
The company received approval for its tenth cannabis dispensary in Illinois.
An analyst's upgrade and hopes that better days are on the way are driving the pot stock higher.
These cannabis stocks are rolling in the green.
This Jefferies "upgrade" is not as good as it sounds.
With its balance sheet issues now addressed, the most popular marijuana stock has other problems to tackle.
This should shake out to around $0.30 per Acreage share.
This marijuana stock has made efforts to rebuild and reorganize this year, but has it done enough?
These two agricultural stocks should skyrocket if recreational marijuana is legalized in the U.S. Which one is the better buy?
This pot company continues to impress with astonishing revenue growth and stable profits.
Investors hope that the popular pot stock will recover this year. But in order for that to happen, it has to get a lot right.
Both of these big names have had their fair share of stumbles. But one is showing glimmers of hope.
Everyone is talking about these two promising marijuana companies. Which one is the better buy?
This cheap stock is a favorite with Robinhood investors, but it's facing serious headwinds to future growth.
These companies offer compound annual growth rates ranging from a low end of 53% to as much as 140%.
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.