If you’re a Cannapreneur who is hoping to earn from the booming market, you may have considered investing in cannabis stocks. You wouldn’t be alone either. As voters continue to approve both recreational and medicinal use, interest in the cannabis stock market has steadily been increasing. Thirty-six states have passed legislation that legalizes the use of marijuana for medicinal purposes with more states looking to pass similar legislation.
In this article, we provide stock options and ETFs (exchange-traded funds) to give you a kickstart when looking into marijuana stocks.
How to Invest in Marijuana Stocks
The easiest way to invest in marijuana stocks is to go through ETFs. These funds allow you to buy multiple stocks at once. This helps you avoid the hassles that come with investing and monitoring individually. Below are a couple of marijuana-focused EFTs that caught our attention.
Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ)
This index includes mostly marijuana or hemp companies and trades on the Toronto Stock Exchange. Investors in the US can buy shares on the over-the-counter market.
ETFMG Alternative Harvest ETF (NYSEMKT:MJ)
This New York Stock Exchange index tracks the Prime Alternative Harvest Index consisting mainly of marijuana and hemp products with some tobacco-related stocks.
The Cannabis EFT (THCX)
Companies that form part of this EFT cultivate, produce or distribute cannabis for both medical and recreational purposes.
AdvisorShares Pure Cannabis EFT (YOLO)
YOLO tracks Canadian and U.S. companies in the healthcare, consumer products, and real estate sectors. It invests most of its net assets in companies that obtain at least half of their net revenue from the hemp and marijuana industry.
The Companies Behind Some of The Best Performing Cannabis Stocks in 2021.
Many investors are seeking to profit in the marijuana industry as more states and entire countries decriminalize or legalize the use of marijuana. These growing markets offer exciting opportunities for individuals and businesses to start their investment journey. Note that it’s up to each investor to analyze and make their own decision when it comes to buying stocks for investment.
Based in Illinois, Green Thumb Industries owns retail cannabis stores in 12 US states and operates 13 manufacturing facilities. Although the company has a license to open 96 retail cannabis locations, only half that number has been opened to date. They have seen significant growth in their home state since the legalization of marijuana and recently came second on Crain’s Fast 50 list of rapidly growing companies.
Trulieve opened their 100th store in the United States with dispensaries in Florida, California, Connecticut, Massachusetts, Pennsylvania, and West Virginia. The company is the largest in Florida and is responsible for almost 50% of all marijuana sales in the state. By focusing on their seed-to-sale model, Trulieve has become the first and largest fully licensed medical cannabis company in the State of Florida.
This Ireland-based neuroscience and biotech pharmaceutical company bought GW Pharmaceuticals in February 2021, making it the biggest acquisition deal in the cannabis space. GW Pharmaceuticals is the global leader in cannabinoid-based medicines and produces Epidolex, the FDA-approved medication. The future looks bright for Jazz Pharma and its investors.
Wall Street analysts have given Village Farms a ‘strong buy’ rating as the company gets into cannabis production in the US. Village Farms is one of the country’s largest growers of greenhouse produce. They specialize in cucumbers, tomatoes, and peppers. The joint venture with Emerald Health Therapeutics will see the company converting 25 acres of their Ladner, British Columbia, greenhouse into a modern and state-of-the-art glasshouse. This new facility is set to produce 75,000 kilograms of medical and non-therapeutic cannabis.
Tilray Inc — marijuana grower, retailer, and researcher
This Canada-based marijuana lifestyle and consumer packaged goods company produces more than 20 brands in North America, Europe, Australia, and Latin America. Focused on cannabis research, cultivation, and distribution the company sells alcoholic beverages, hemp-based food, and a variety of cannabis products. With stocks on the rise, Tilray Inc is outperforming the market in late August 2021.
Should You Buy Cannabis Stocks?
The cannabis industry is still in its relatively early stage of growth. Investors should decide whether they’re looking to invest aggressively or conservatively. A general rule of thumb when it comes to investing is to take the long-term approach. This differs in the rapidly changing marijuana industry as the criteria you use to buy today may dramatically change in the coming months. The relaxation of US federal laws could be highly beneficial to marijuana businesses across all states. On the other hand, the introduction of new restrictions could be devastating.
Luckily, broad-based index funds may produce a return on investment no matter which stock market sector does well. If you’re looking at investing aggressively into marijuana stocks in 2021, you may find yourself pleasantly surprised with the high-risk and high-reward market.
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