One way to participate in the cannabis industry is by purchasing the stock of companies with ties to marijuana. Cresco Labs (CRLBF) is involved in growing, manufacturing and distributing cannabis-related products for consumers and currently operates in 10 states. But potential investors should be aware that the company failed to generate net income for shareholders in each of the past three years. The stock trades over-the-counter, or OTC, which means it will be less liquid than major stocks that trade on large exchanges. The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice.
Jazz is currently evaluating Epidiolex in a late-stage clinical study as a treatment for patients with epilepsy with myoclonic-atonic seizures. Its pipeline also features other cannabis drugs in phase 2 testing, targeting autism spectrum disorders and related issues. In addition to its cannabis products, Jazz markets sleep-disorder and cancer drugs.
What is the Marijuana industry?
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. As of Nov. 2019, more than 30 states have passed laws that broadly legalize marijuana in some use. Marijuana has been made legal for recreational use in Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington, and Washington D.C. Unlike a lot of other financial companies, we’re here to help build healthy financial habits, hit money goals, and remove long-standing barriers to building wealth.
Although there is potential for growth within the nascent cannabis industry, there’s always a risk of loss with any investment. That’s why it’s important to make sure you understand any investments you’re making before you buy into the marijuana business. It continues to deliver revenue growth and maintains a strong balance sheet even with macroeconomic and cannabis industry headwinds. Green Thumb should have plenty of growth potential over the long term as the U.S. cannabis market expands. Marijuana industry investors should closely monitor any marijuana stocks or ETFs in their portfolios, along with the overall industry itself.
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Therefore, before investing in any cannabis stock, it’s essential to do your research and understand the potential risks involved. The most straightforward way to invest in cannabis stocks as a retail investor is to buy shares of stock issued by companies working in the cannabis industry. As recreational and medicinal marijuana becomes more widely established, companies are now taking steps to go public and offer shares on major exchanges. When deciding how to invest in cannabis stocks, investors may choose among a variety of publicly-traded companies operating in the cannabis industry. Because cannabis is still federally illegal, US-based companies that are plant-touching typically trade on the Canadian stock exchange. There are a few players available on major stock exchanges, and most are Canadian.
EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman. Get instant access to more trading ideas, exclusive stock lists and IBD proprietary ratings for only $5. Canadian pot producer Canopy Growth Corp. (CGC) in May began trading on the New York Stock Exchange. The Canopy IPO followed the debut of Cronos Group (CRON) on the Nasdaq in February. MedMen, a U.S. marijuana company valued at $1.65 billion, had its IPO in Canada in May as well.
Risks of Buying Cannabis Stocks
Connecticut is expected to do so before the year’s end, with New York projected to open soon after. Here in Massachusetts, there’s been more than $3.3 billion in sales since recreational dispensaries opened their doors in 2018, and this year alone, sales are already on track to reach more than $1.4 billion. The stock market and private equity are no longer the only ways to invest in cannabis. Learn why investing in cannabis through regulation crowdfunding platforms will change the landscape for the growth of the marijuana industry and how to start investing in cannabis today.
Composite Ratings are a broad assessment of a company’s success, including its profits and technical specifics. If the company you’re studying has a composite rating greater than 90 then it’s generally considered to be a good investment. GW Pharmaceuticals holds the honor of being the first biotech company to win FDA approval for a cannabis-based drug. While there’s considerable debate as to how successful the company will actually be, some pundits believe that the company’s peak may be as high as $1 billion. The company’s management is also impressively stocked with executives who have at least two decades of pharmaceutical experience, particularly in the arena of launching new products.
If you aren’t ready to pick a marijuana stock you can choose an ETF instead. We can’t emphasize enough how much these stocks are relying on marijuana legalization to take place across the US to increase sales. This is significant news for the cannabis industry, which has been waiting for federal legalization to happen in the US. This also comes after President Biden’s announcement about marijuana reform. Tilray (TLRY) is another company that sells consumer products related to cannabis as well as hemp-based foods and alcoholic beverages.
Is there any hope for cannabis stocks?
However, new regulations allow anyone to invest in new cannabis brands- here’s how. However, its stock is listed on the Canadian Securities Exchange (CSE). Investors need to be sure their brokerage account allows OTC https://g-markets.net/helpful-articles/trading-the-shooting-star-pattern/ trading before investing in CURLF. Industry-wide REITS involve this same process, only for a particular sector. And since real estate almost always goes up in value, REITs are not the riskiest option in the toolbox.
The company isn’t profitable yet, but that’s mainly because it’s still heavily investing in its expansion. With its experienced management team and massive growing operation, Canopy Growth has the biggest market cap for a reason. Its ten facilities span more than 4 million square feet of growing space. Further, the company has recreational agreements with all ten Canadian provinces, and it has a strong footing in the international market, operating in 15 countries worldwide. Despite being a fledgling industry there are already marijuana companies with great potential and with tremendous achievements under their belts. Prognosticators view marijuana as a potential game-changer that can challenge established alcohol and pharmaceutical brands.
Investors can get a piece of the action by investing in holding real estate investment trusts (REITs). Cannabis REITs were been the best-performing property sector for the second year in a row in 2020, soaring more than 150% despite the ongoing pandemic. Many of the companies discussed above, some of which are American companies listed on Canadian exchanges, trade as American Depository Receipts in the U.S. Cresco trades at the lowest price/sales ratio on this list, which could prove interesting if the company manages to improve upon its 2.6% growth in the future.
You don’t need a time machine to get in on the cannabis market and make a profit, but if you an do it today, you should. That’s because the banking laws may be changing soon, and when they do, your chance to invest at depressed levels will wither. In July, Senate Majority Leader Chuck Schumer introduced a bill to fully legalize cannabis at the federal level.
- In the medical segment, people delayed doctor visits, causing new patient starts to drop.
- The safest way to play the space is to invest in companies that will benefit from legislation but are also gaining share and improving profitability on their own.
- Do you understand the potential risks of investing in an industry that is currently illegal under federal law?
- While the growth potential of the cannabis industry may sound exciting, there are some key risks to keep in mind.
No matter which cannabis market you’re interested in or which aspect of the marijuana industry you want to invest in, you have many options for cannabis stocks to buy. There are pot stocks available on the New York Stock Exchange, NASDAQ, and over the counter. In 2019, the medical marijuana market accounted for around 71% of the revenue within the legal marijuana market, according to a report from Grandview Research, Inc. If you don’t plan to dabble in penny stocks beyond marijuana stocks, consider our picks of the best brokers for online stock trading instead. Above all, you want to choose a broker that offers a variety of investments — including ETFs and mutual funds — and has low or no commissions, useful educational tools and high-quality customer service. All that said, it’s important to remember this is a nascent industry whose main product is still a Schedule 1 drug at the federal level.
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