If You Had Invested in These Marijuana Stocks…
By: Jon Hiltz
The roller coaster of investment for the emerging worldwide cannabis industry has been even more volatile than traditional stocks. This, of course, has much to do with the ongoing dance of legality that exists in many countries as they give birth to new marijuana sectors.
So in this world of uncertainty, what are the stocks in the cannabis space that have stood the test of time and made investors very happy? More importantly, which ones are the traditional blue chip investors watching? Marijuana.com interviewed the financial experts to find out.
We started with Ben Stoto who is the Research Director from the very popular CNBC show “Mad Money.” The star of that show is Jim Cramer — the TV host who looks like he’s giving you business news while having a massive heart attack.
“We get a ton of requests from callers and audience members who are curious about how they can invest in marijuana. Unfortunately, the answer is that there are not many good options [in the U.S.] for people.”
Stoto added that the reason behind the poor outlook is the majority of publicly traded companies in the cannabis space are still too small to be considered safe investments by the traditional experts. That being said, there is one “long-term winner” in Stoto’s opinion. “The one we have recommended for quite some time is a company called GW Pharmaceuticals.”
GW first came onto the publicly-traded landscape in 2013, so if you would have invested at that time, how much could you have made by now?
“GW’s IPO was May 1st, 2013 and their price was $8.90 [at the time] and the stock currently trades at $124.81.” Stoto added that GW’s clinical trials for their products, which treat various diseases, have gone well, which could be a partial reason for the significant increase. “If you had bought into the IPO price for $1,000, that position would be worth $13,000 now.”
Other than the relatively solid rock that is GW Pharma, there is one that has just come up for the Mad Money team. “Recently we’ve been recommending Scott’s Miracle Grow, the fertilizer company. They have a small but very rapidly growing division that’s focused on hydroponics. In the states that have legalized they need controlled grows, which are mostly going to be indoors and [cultivators] are buying supplies from Scott’s Miracle Grow.”
Stoto added that over the last year, Scott’s shares are up 31 percent whereas the overall S&P 500 is up 22 percent.
Other than getting industry investment advice from a popular TV show, what about someone who has lived and breathed marijuana stocks for the last several years?
We caught up with Jason Spatafora, CEO of Marijuanastocks.com; he too was hot on GW Pharmaceuticals.
“If you had invested in the spring of 2013 in GW Pharma, say a thousand dollars, your investment today would have made a 1,000 percent gain on it.” Spatafora added that he got his start in the summer of 2013 by investing in a payment solution company called Mediswipe (MWIP). “I put $500 in it and that got me 10,000 shares. Two days later the stock went up 50 percent.”
Spatafora’s strategy was not to invest in the marijuana itself, but rather the complimentary industries around cannabis which he believed were going to benefit from continued legalization. That included lighting companies like Growlife Inc. (PHOT). “I started buying it at 4 cents and the trade just kept going up. So I started pulling out my money from the blue chips I was in and investing it into this company. I ended up investing ten thousand dollars in them and then Colorado went legal. By January 10th my $10,000 investment was worth $75,000.”
That would have been a good end to the story, but Spatafora went on to point out that shortly after the peak of his investment came about, the whole market dropped 60 percent. “By the close of [that] day my $75,000 was worth $29,000.”
Spatafora also has some sage advice to those of us looking to connect with long-term marijuana stocks at this time. “The thing that people need to know is that you can’t marry any of these things, it’s all highly speculative. You have to really take your profits [when they come.]”
He also pointed out the Canadian winners in the cannabis investment landscape, and you can’t mention Canadian pot without talking about Canopy Growth Corporation. “Canopy Growth when it IPO’d, was just over a dollar and it went as high as nineteen dollars this year.”
Spatafora sees a lot of potential in Canadian cannabis investments moving forward. “There are companies right now that I think will do very well. As you know, Trudeau wants to legalize marijuana on a recreational scale. Right now, I know from talking to a lot of these public companies, they are operating at a huge supply and demand deficit. So with recreational cannabis, it will just be a windfall. I think the Canadian market is really going to be the best market going into late 2017.”
The big takeaway from all of this is that if you are planning to invest your hard-earned money into the cannabis sector, or any sector for that matter, it’s imperative you do your homework or hire someone who knows what they are doing. Not many of us have thousands to lose on a hunch.free wordpress themes