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3 Things You Need to Know Before Investing in Marijuana Stocks

Pot stocks garner interest for a good reason as most cannabis investors are banking on the exponential growth potential of legalized marijuana products to drive stock prices higher. The global cannabis market is expected to reach a staggering $73.6 billion by 2027, according to this report from Grand View Research. This indicates an annual growth rate of 18% between 2016 and 2027.

But while investing in cannabis companies, you need to consider three things about investing in marijuana stocks.

Investing is a long-term play

3 Things You Need to Know Before Investing in Marijuana Stocks

Similar to equity investing, you need to be patient with marijuana stocks too. The cannabis industry is still at a nascent stage with many growing pains. However, over the long-term, pot stocks can create massive wealth for savvy cannabis investors.

For example, Cronos Group (NASDAQ: CRON) is currently trading 71% below its record highs. But, in the last five years, the cannabis giant has returned a whopping 1,740%. Right now, the cannabis industry is grappling with oversupply issues as there are multiple players. Further, recreational sales in Canada are impacted by low-cost products in the black market.

As cannabis highly regulated, the rollout of retail stores is slower than expected. Over time, these issues will be resolved and improve demand-supply metrics.

Legalization is key

3 Things You Need to Know Before Investing in Marijuana Stocks

Canada was and is the only country in North America to legalize recreational marijuana. This drove stocks of several marijuana companies to record highs. Now all eyes will be on marijuana laws in the United States. Cannabis is still illegal in the U.S. at the federal level and is a way bigger market than Canada. Investors can expect pot stocks to sky-rocket if and when the U.S. legalizes cannabis at the federal level.

Further, most licensed producers have developed medical marijuana products as well. The medical marijuana market is rapidly expanding all around the world which will be a key growth driver for most stocks. In 2019, medical cannabis accounted for 71% of total cannabis sales.

Invest in cannabis giants

3 Things You Need to Know Before Investing in Marijuana Stocks

The current cannabis industry can be compared to the dot com boom at the start of this millennium. While there are multiple players right now, only a few firms will survive a volatile but high growth market. Several cannabis companies are still unprofitable and continue to burn through cash. They will have to raise equity or debt to stay afloat and this will inevitably impact their stock value.

However, there will also be a few winners in this space. You can bet on companies that are market leaders with a huge presence. Grand View Research identifies companies such as Aurora Cannabis, Canopy Growth, Aphria Inc, OrganiGram Holdings, and GW Pharmaceuticals as top cannabis and hemp stock players. Add these stocks to your watchlist and track their performance this year.

3 Things You Need to Know Before Investing in Marijuana Stocks

About Cannin: Your Pot Stock Investment Experts

Pot Stocks Algotrading Stock SoftwareCannin is your trusted resource for information about pot stock and hemp stock investment opportunities. Our global team of experts evaluates over 200 emerging marijuana and hemp stock investing opportunities. We aggregate hundreds of hours of research and provide tips on the best marijuana and hemp stock investments for 2020. We provide the latest marijuana investment and hemp investment news and analysis. 

Use Cannin as your resource for breaking cannabis and hemp investing news, featured cannabis and hemp company analysis, comprehensive cannabis and hemp stock reports, or get your free trial now and use our Smart Stock Algorithm to take the guesswork out of profiting from the cannabis industry. Is it too late to invest in marijuana or hemp stocks? No! This is the perfect time to invest.

Market analysts expect the marijuana and hemp industry will have an annual value exceeding $75 Billion in the next decade. The time to invest in marijuana and hemp stocks is now. Are you looking to buy stock in hemp companies or marijuana companies for 2020? Interested in emerging penny hemp stock companies? Looking for the best Canadian marijuana stocks to invest in? We can help.

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