Cannabis Stocks

A key author at AskGrowers, Lana Braslavska, specializes in presenting the latest news and trends within the cannabis industry. Her articles often highlight influential personalities and delve into their impact on the cannabis world. Her writing not only keeps readers informed about current events and key figures in the cannabis space but also provides a deeper understanding of the industry's relationship with public perception and media representation. Lana's expertise makes her an invaluable resource for anyone seeking education on the evolving landscape of the cannabis industry.

Reviewed by Denys Svirepchuk

Published

May 25 2021

Updated

Nov 17 2023

Guides

Industry

267

6 min

Table of contents

How to Invest in Cannabis Companies’ Stocks
Some of the Best Cannabis Companies to Invest In
References

In the last few years, cannabis sales have substantially increased, and the market is expected to grow even more. In 2019, cannabis companies raised $117 billion. According to BDS Analytics and Arcview Market Research, global spending on legal cannabis will hit almost $60 billion in a decade. There are many trends related to the cannabis industry that is clearly showing the potential the sector has. The range of customers will be more diverse. There will be more cannabis products available on the market, to name a few. In addition, the push toward the legalization of cannabis is increasing.

On March 25th, 2021, a few members of Congress sent a letter to President Biden pointing out to the administration it is time to untie the rules around the usage of cannabis.

“While we work to deschedule cannabis legislatively, your administration should act within its power to stop legitimizing unfair cannabis laws.”, states the letter. “You have previously expressed your commitment to decriminalizing cannabis in acknowledgment that a cannabis conviction or even the stigma of cannabis use can ruin lives and prevent people from voting, gaining employment, and contributing to society. You can meet this moment and help end our failed punitive policy of cannabis prohibition.”

All these trends and the legalization movement that keeps going stronger show the new sector has the potential to grow even more. It is why investing in marijuana stocks 2021 became one of the trending topics.

How to Invest in Cannabis Companies’ Stocks

Everyone who is considering investing in cannabis stocks should approach the subject ready to learn and research rather than just jumping into it. There are a couple of things to understand before investing.

There are different cannabis product categories, and those are recreational marijuana and medical marijuana. The first one is legalized in DC and fifteen US states, while the second is legal in the District of Colombia and 35 states in the US.

When investing in stocks, including marijuana stocks, be aware there are certain risks included. The industry can’t be observed as a safe bet, not just yet, because it is very young.

Risks of Investing in Marijuana Stocks

“It’s hard enough to pick stocks in established industries. It is exponentially harder when it is not even clear who the leaders are or will be.”, says vice-president of research at HighView Financial Group, Dan Hallet.

What may happen is the unevenness of supply and demand, and when supply exceeds demand, the prices will go down. Many American pot companies can face the same problem - to run out of money, in which case they have to issue new shares. When doing that, the value of the existing ones reduces. Of course, there are political and legal risks. It is a known fact that the banks that cooperate with pot-related businesses experience severe restrictions placed by US federal law.

When you find the marijuana stock you are interested in, make sure to do your research on the company’s financial situation, the position on the market, its management team, to name a few. The more information you get, the better. Take your time to explore the top best marijuana stocks and cannabis-focused ETFs (exchange-traded funds).

The current president of BioMediCan and a former investment banker Dennis O’Neill says that investing in ETFs requires caution but is less tedious. “ETFs for people who do not have the time or experience investing in cannabis while Individual stocks for people who have experience and time.”, he adds.

Observe the industry and its dynamics. The situation in the sector is a bit different than in other sectors, as the cannabis industry is changing pretty fast. That is why it is essential to monitor the situation closely.

When investing in marijuana stocks, you need to be careful, but that’s not something you already don’t know. Investing in stocks always comes with some amount of risk. To become a marijuana investor and start buying cannabis stocks, you will need a brokerage account. Opening the account takes a few minutes of your time. It is advisable to start small. Over time, as the market grows and the industry gets more substantial, you may consider adding more shares and keep going.

Another tip you may take as an option is to go international when investing and not focus only on the US cannabis companies. You may take Canadian cannabis companies into account. Also, if you are a beginner, focus on the biggest companies in the market.

Is now a good time to invest in cannabis stocks? Editor of the BCMI Cannabis Report, Chris Damas, says the marijuana stocks do a lot better in the second part of the year, so if you have been considering the option of buying them, this could be the time.

Some of the Best Cannabis Companies to Invest In

If you are eager to invest in marijuana stocks, here are some of the top companies you may consider.

Cannabis Companies to Invest In

Green Thumb Industries – marijuana grower and retailer, with several stores across the United States. The company plans to open many more cannabis retail stores across the country and expand to additional states.
GW Pharmaceuticals –The company does not grow cannabis as some other big companies in the cannabis industry. Its focus is on using cannabinoids derived from cannabis as the main ingredient to develop brand new therapeutic solutions. The idea is to take medical cannabis to the next level.
Canopy Growth Corporation – it is the company that builds its name pretty fast. It is one of the most significant cannabis producers worldwide and one of the three top three cannabis companies in the world.
Cronos Group – It is one of the largest companies in the cannabis market, and it is focused on recreational marijuana. The company is among Canada’s key marijuana growers.
Trulieve Cannabis – marijuana grower and retailer placed its focus mainly on the Florida medical marijuana market. The company’s profits keep going up for years. In addition, Trulieve Cannabis plans to go forward by entering Massachusetts’s recreational marijuana market.