Marijuana is going through a legalization phase.

ALSO READ: CryptoLife with Levi: March Crypto Recap

Decriminalization of cannabis started in the 70s, culminating in Colorado and Washington becoming the first two states to legalize the substance for recreational use. In 2014, Alaska and Oregon followed and by 2018 there were 9 states in total that regulated marijuana similarly to alcohol.

At the same time businesses are stepping up to fill the demand that is cropping up. The Canadian company Cronos Group became the first marijuana company to list on a major US stock exchange when they started trading on the Nasdaq in February 2018.

Cannabis is going to become big business as the wave of legalization rolls through, estimated to grow to between $50 and $70 billion by 2021. The landscape looks promising with many companies fighting it out to become the next Wal-Mart of Weed.


Get Up To $1,000 in Free Stock with Robinhood--the Commission-Free Brokerage!

Open a new account and receive one free stock valued at up to $500! Then, once your account is open, get more free stocks (value from $5 to $500) for each friend, family, person you refer! USE THIS LINK to get started with Robinhood!


Some of the biggest players include Scott’s Miracle Gro ($4.8 billion market cap); Canopy Growth Corp ($5.4 billion); Aurora Cannabis ($4.3 billion) and GW Pharmaceuticals ($3.8 billion).

Of the four biggest players however, only one is really making any money. Scott’s Miracle Gro lost $21 million in the last three months of 2017 and GW topped that figure by losing a whopping $46 million in the same time frame.

This is the crux of the problem. Everyone feels like marijuana stocks are about to take off, but that expectation alone has inflated the prices of stocks to the point that they may not be a good play anymore. Few of the companies are making money and people are trading more on hype than on solid financials.

Even Aurora Cannabis which reported net income of $7.2 million on $11.7 million in revenues isn’t as amazing as it seems. Taken at face value, their profit margin of 65% sounds incredible but dig a little deeper and you will notice that their financial statement shows that they counting in their profits $22 million in the form of an unrealized gain (they haven’t sold yet) from derivatives. So it would seem that they are not really making money producing or distributing marijuana.


So do be careful if you’re thinking of investing in a specific marijuana stock.

If it means anything consider the advice of Micah Tapman, a managing director at venture firm Canopy Boulder who is involved in a cannabis startup accelerator when he says that the smart money is in the high-end medical side of the space.

If you’re not sure, you don’t know what to do but you want to get involved, then it might make sense to invest in a marijuana ETF, something like the Horizons Marijuana Life Sciences Index. This ETF attempts to replicate the performance of the North American marijuana market, and helps an enterprising investor diversify while still gaining exposure to cannabis. Their expense ratio is 0.75%, which is on the higher side but you could invest while waiting for competitors to pop up.

Expect to see a wave of new ETFs, and other players pop up in the next years as marijuana becomes increasingly more accepted across the country. A small investment now could pay off big in the future.



The markets have dropped over 30% since their highs just a few weeks ago because of the Coronavirus, but we are starting to see more signs that this might be a PERFECT BUYING OPPORTUNITY:

#1. HOT Fool Picks in Spite of Crash. Here is why we love the Motley Fool--On Thursday, March 19, 2020 they recommended Zoom Video (Ticker ZM) when it was at $124. Today, March 23 it closed at $160, that's up 29% in 3 days! But that's not all, they also recommended it October 3, 2019 when it was at $77 so that is up 108% since they picked it back in October, in spite of the market crashing 30%. Other recent picks are TSLA, NFLX and TTD which are all UP since they were picked!

#2. Stock Prices Are Down 30%.  This is a good thing! If you are thinking of buying stocks, now's your chance to get quality companies at much more affordable prices. This offers a very attractive entry point, because stocks are ON SALE and you can now buy quality stocks for 30% less than you would have paid for them in February.

#3. More Articles Are Starting To Recommend Buying. As we are nearing the bottom of this drop, we are starting to see more articles like this: BlackRock is suggesting we may be at a "once in a lifetime opportunity", Morgan Stanley says to start buying, and Warren Buffet has a stock pile of cash and rumors are he is starting to buy.

#4. Dollar Cost Averaging Works! Since nobody knows where the bottom will be exactly, smart investors continue to invest a fixed dollar amount in the market each month. This is called Dollar Cost Averaging. That way, when the markets are down you are buying more shares of your favorite stocks at cheaper prices. This helps drive down your average cost and increase your profits when the stock market moves back up.

If you need recommendations for stocks to buy now, keep in mind that the Motley Fool Stock Advisor beat the market by over 30% the last 4 years, and they are currently recommending that NOW IS THE TIME to start buying some of those quality stocks that should make up the foundation of your portfolio. The Motley Fool Stock Advisor service is recommending at least 15 stocks that you should plan on holding for the next 3 to 5 years. So, if you need investing ideas, it is a PERFECT time to consider the best stock newsletter over the last 4 years--The Motley Fool Stock Advisor

Normally it is priced at $199 per year but they are currently offering it for just $99/year if you click this link

P.S. this offer is still backed by their 30-day money back guarantee.
P.S.S. Still skeptical? Read this complete Motley Fool Review.