Buying Marijuana Stocks
Saturday, August 10th, 2019
I hope you’re ready for a few disclaimers, because here they come… the opinions per the flowing cannabis stocks are mine and mine alone, not those of The Greenery. Secondly, there is risk involved with all investments and it’s possible to lose money on any speculation, so please don’t think you’re going to get rich quick off cannabis stocks. Trading of this nature isn’t for all investors, and all investments are made at the investor’s own risk (that’s you). And lastly, I am not a financial adviser.
There. I’m glad we got that out of the way because legalese is language abuse in my opinion, but that stuff was important because realistic expectations are always best when it comes to investing. And frankly, it’s all worth it because this blog has been a long time coming. At least once a day, someone will ask me if I know anything about pot stocks right after they shop in our Durango dispensary, and I’ve always wanted to write something longer than the five-minute rundown I regurgitate in our busy shop for these people to read at home. So, here it is…
Money talks. We all know it. Marijuana was kept illegal for a century because privatized prisons made billions from incarcerating nonviolent pot smokers; rich pharmaceutical companies lobbied against legalization because they didn’t want the competition; alcohol companies didn’t want to compete against a safer intoxicant and police unions wanted to keep their fat budgets so they could chase down people who like growing and smoking plants—you can read all about it HERE, HERE, and HERE. There were a lot of bad guys against us in the beginning, and honestly, they’re still around, but they’re getting their butts kicked because now, we have money of our own: we’ve already surpassed 1 billion (that’s nine zeros) in tax revenue from marijuana in Colorado alone, and it keeps stacking up daily. With that kind of financial backing, the government has become addicted to our industry, so there’s no end in sight, and believe it or not, a lot of the bad guys are starting to invest in cannabis stocks thanks to that whole “if you can’t beat them, join them” paradigm, but we’ll get to that in a bit.
And that’s where investing in marijuana stocks comes in. I buy a pot stock here and there whenever I can, and yes, I do it with the hopes that I’m buying in on the ground floor which will make me rich someday, but really, I do it to support national cannabis legalization. Every dollar I throw behind marijuana in the stock market makes us a little stronger and the bad guys a little weaker, so I don’t plan on stopping. Ever. You know why? The hypocrisy is galling. The national government takes a ludicrous amount of money from our dispensary in the form of taxes even though they say the drug we sell is illegal, and you better believe that I pay income tax to work here. I mean honestly, how do they get away with saying it’s illegal while at the same time making me fill out a W2?
Anyway, I’ve talked about the why, but here comes the how. It’s simple. Just open a stock trading account through someone like Charles Schwab, transfer money through your bank account, find a pot stock you like, buy it, and then brag to your friends about how you’re beating down illegal pot with America’s most potent weapon, capitalism. Fun, right? But, and here comes another disclaimer, most pot stocks are volatile as all get out, and there’s a chance your “I just bought a pot stock” smile will fade right along with your dividends, so I’m going to outline a few of the big players that I think represent safer investments than others, because I’d imagine that’s why you’re really reading this. Here they are:
Tilray (TLRY) In a way, this is the pot stock that got everyone excited about the possibility of investing in legal cannabis on the ground floor. Most cannabis stocks are traded on the Canadian market before the NYSE (because Canada is arguably cooler than we are), and that’s how Tilray started. But then they become one of the first stocks to move from the Canadian market to the one here in the states, and when that happened, their share price rocketed from around $2 to $200 almost instantly, and despite my disclaimer, quite a few people got rich quickly from a pot stock. However, that drastic increase was overvalued, and today, Tilray is trading in the $40 range, and it’s slowly climbing back up because the overvaluation has been mitigated by the market. This company focuses on the possible medicinal aspects of marijuana by conducting studies and fueling wholistic pharmaceutical companies, so if that’s the side of cannabis that interests you, buying Tilray will put your money where your values are.
Aurora Cannabis (ACB) This is another Canadian stock that experienced an uptick when it landed on the NYSE, but it only jumped from around $2 to $8 because the market learned its lesson thanks to Tilray. Today, it’s sitting in the $6 range, so this stock is everyone’s darling (especially amongst millennials because the recreational side of this company is trendy). But don’t let the “Canadian” designation fool you because this company has designs on world domination—they’re already operating in 24 countries, and there have been rumors of an impending investment by a well-known beverage company to make CBD drinks, so I’d expect some added value in the coming months. Again, this is my personal opinion, but I’d recommend Aurora for serious long-term investors and it’s the second largest cannabis company in the world right behind this next one.
Canopy Growth (CGC) When it comes to big business, these guys are at the top just like their name would suggest; their canopy covers everything. And this is a perfect example of that shift I talked about wherein the bad guys are buying in, because the makers of Corona beer invested billions into Canopy Growth even though their parent company had lobbied against legal marijuana in the past. Hypocrites. But hey, it’s better late than never, and if one of the world’s largest beer makers is buying into this stock, that should tell you something about its future. In my opinion, no long-term cannabis investment portfolio is complete without at least a few shares of CGC.
Acreage Holdings (ACRGF) If you like hypocrites, you’ll absolutely love this company. Their entire board is made up from proverbial fat cats, and their lead lobbyist is none other than John Boehner, who was the 53rd Speaker of the U.S. House of Representatives. This guy spent 24 years in congress doing his dandiest to keep marijuana illegal because his constituents in Ohio were barely out of the stone age, but now that marijuana pays better than congress, John’s values seem to have changed. Go figure.
Cronos Group (CRON) This company has its fingers in everything pot-related, and their reach covers five continents. However, companies like this represent a moral conundrum for investors such as myself, because when I bought this stock, I wanted to support cannabis and nothing else. But then a few months later, Altria, the company that makes Marlboro cigarettes, bought way more stocks than I did ($1.8 billion more), and now, it looks like I’m about to own part of a tobacco company, which isn’t what I wanted. But hey, like I said, money talks.
Alright… those are the “big five” and the stocks that represent the safest bets, but there’s no fun in that, so here are a few up-and-comers that could get big (or fade away into obscurity) for all you gamblers out there:
Harvest Health (HRVSF). This company was born and raised right here on our own Left Coast, and they’re making waves in California. In fact, they own Evo Lab, which makes vape oils that we sell right here in our Durango dispensary. So, if you buy some stock and then come into our shop and buy some vapes, you’ll be supporting your own investment, which is pretty cool when you think about it. Hexo Corp (HEXO) is another Canadian stock, but it landed on the NYSE eight days ago, so expect an uptick soon. Medicine Man Technologies (MDCL) is a consulting firm with low overhead and their stock is in the $2 per-share range. Kushco Holdings (KSHB) is another low priced option because these guys make the auxiliary products used in the cannabis industry (fun fact: they make the child-resistant containers we use in our dispensary). And lastly, take a look at Medmen Enterprises (MMNFF). These guys copied the Mad Men branding from that AMC show, which was an interesting choice, but they run a chain of dispensaries in California, and they plan on becoming the Starbucks of dispensaries, so there’s room for growth with this stock.
There! Those fifteen-hundred words were definitely more definitive than the short spiel I give to people when they ask about stocks after waiting online to buy a joint, and if you’re one of the new people who I referred to this blog, thanks for reading! It means quite a bit to me. But please, if you’d like to talk about this in person, just come down to 208 Parker Avenue and ask for Jesse. We’ll chat as much as you’d like, because if you’re interested in furthering legalized marijuana through buying cannabis stocks, We’re Your Best Buds!