Investing in Cannabis Stocks

Marijuana plants

Investing in Cannabis Stocks

Jun 26 2019, by Jessica McElfresh in Legal Blog, Marijuana Business

As the cannabis industry expands around the U.S. and Canada, both experienced and novice investors are interested in profiting off the growth. Per ArcView Market Research and BDS Analytics Spending, data on legal cannabis, spending on marijuana is expected to increase 230% to $31.3 billion by 2022. In other words, spending on cannabis is expected to grow considerably, which means legal cannabis businesses will profit, as can their investors.

That being said, investing in cannabis businesses isn’t risk-free. For the year ending January 11, 2019, the U.S. Marijuana Index fell 20.7%, according to Investopedia. Then the Marijuana Index rose from $91.00 to $120.00 by May 10, 2019. Growth is coming, but not without its ups and downs.

Investors who wish to purchase cannabis stocks need to do so carefully. They should consider attorney Jessica McElfresh’s cannabis investment tips and research top-performing stocks. If you have questions about investing in the cannabis industry, contact a marijuana business attorney at McElfresh Law right away. Call (858) 756-7107 today, or reach out online to schedule a consultation of your case.

Marijuana Stock Listings

You can find cannabis stocks listed on the New York Stock Exchange (NYSE) and the Nasdaq. Both exchanges saw their first cannabis businesses in 2018. You also can find marijuana businesses on the Toronto Stock Exchange (TSX) and other Canadian exchanges.

As of mid-2019, many marijuana businesses are still penny stocks and traded in the Over-the-Counter (OTC) markets. These markets have less strict filing and disclosure requirements, which makes many investors automatically wary of them.

There are legitimate investments on the OTC markets, just as there are poor investments on the NYSE and Nasdaq. It’s essential for investors to perform as much research as possible on any companies directly or indirectly involved in the marijuana industry before purchasing stocks.

Cannabis Stocks to Watch

Every investor should perform their due diligence before purchasing a stock. At this point, however, some businesses to consider include:

  • Canopy Growth Corp. – This is Canada’s first marijuana company. It is also the world’s largest publicly-traded marijuana company. It owns and operates several brands, and produces both medical and recreational marijuana strains.
  • Aurora Cannabis Inc. – This is a Canadian company that expanded by acquiring MedReleaf in March 2019.
  • Aphria Inc. – Aphria markets itself as one of the lowest cost producers of cannabis. In April 2018, it finalized a deal to sell its products online through Shoppers Drug Mart, a Canadian pharmacy chain.
  • Cronos Group Inc. – Cronos Group is a Toronto-based medical marijuana cultivator and the Nasdaq’s first cannabis stock. Cronos is an international company that currently does not do business in the United States.
  • The Hexo Corporation – This is the only licensed medical marijuana producer headquartered in Quebec, and is one of the largest licensed marijuana companies in Canada.
  • Terra Tech Corp – Terra Tech is a decade-old agricultural company with a medical marijuana brand, IVXX, known as Edible Gardens.
  • AbbVie – This is a pharmaceutical company that has an FDA-approved synthetic cannabis drug on the market. Marinol is intended to treat nausea in chemotherapy patients and individuals with AIDS.
  • GW Pharmaceuticals – This is a U.K.-based pharmaceuticals company with an FDA-approved drug based on an active marijuana ingredient. Epidiolex is approved to treat seizures from rare and severe forms of epilepsy, Dravet syndrome, and Lennox-Gastaut syndrome.
  • The Scotts Miracle-Gro Company – Scotts Miracle-Gro has acquired hydroponic equipment maker Sunlight Supply Inc. and has made other investments into hydroponics.

Investing is Always a Risk – Consult with an Attorney Today

As investments in cannabis companies increase, it’s important to realize that investing is always risky, and no marijuana business is a surefire win. Investors need to perform whatever due diligence they can, diversify their investments, and be on the lookout for scams.

If you need assistance regarding doing business in California’s cannabis industry, contact experienced marijuana attorney Jessica McElfresh of McElfresh Law at (858) 756-7107.