How To Invest On Cannabis Stocks & Why You Should Keep An Eye On This Industry

 

screen-shot-2016-11-28-at-9-36-08-pm

 

 

Stock trading was once limited to brokers on Wall Street, but thanks to online trading, it has become much easier and more affordable in the past 20 years. Today, consumers are able to execute, buy, and sell orders just by using a phone or a laptop.

 

Getting Started in the Stock Market

Beginning is easy as all you need to do to get started is open up a brokerage account. You can find many companies such as TD Ameritrade, Fidelity, Trade King and Charles Schwab among others, that will open an account for you with as little as $500. This is what I recommend:

 

  • Focus on the companies/industry where you would like to invest. For instance, if you follow tech companies, do research about the stock price, news, dividends (fees the company pays its stakeholders when the stock performs well), etc. Stocks that pay dividends are the best.
  • Keep an eye on the company’s news. Everything that happens will bring the stock up or down.
  • Set a budget aside. For instance, if the stock is valued at $15 and you have a budget of $500, you will be able to buy: 33 shares.
  • Trade (sell/buy) stocks online – and avoid an over the phone transaction fee. You will still need to pay a fee ($10 for buying or selling shares, but it will always be cheaper than if you do it over the phone).
  • Do not freak out. Stocks will go up and down. However, the key is not to act on impulse. Do not sell your stock right away because shares have lost $1 or $3 dollars in value.

 

Why You Should Watch the Cannabis Industry

Cannabis has historically been a taboo subject, but now roughly 62% of Americans live in states where cannabis is legal for medical or recreational use. And more states continue to either legalize marijuana or are taking steps to decriminalize it.

 

In the November election, voters in California, Nevada, Massachusetts, and Maine all approved recreational marijuana initiatives. Support for recreational and medicinal uses of marijuana has been growing with over half of the 50 states currently allowing the use of medical marijuana.

 

And now it is quickly turning into a billion dollar business with the growth in the cannabis sector creating new investment opportunities daily. According to the ArcView Group, the legal cannabis market in the U.S. is expected to reach $6.7 billion this year. These figures make it one of the most promising investments on the market right now. The cannabis industry will be in fact bigger than the organic food industry.

 

When we think of cannabis, we should not think about smoking alone, but about the several ancillary industries tagging along such as: edibles, beverages, vapes (think of e-cigarretes), CBD products, etc.

 

As it stands right now, cannabis is considered a Schedule I drug – which means that the Drug Enforcement Administration (DEA) considers marijuana like heroine and LSD. In fact, according to the DEA, cocaine and Meth (Schedule II drugs) are safer than marijuana. On top of that, the pharmaceutical industry is fighting legalization simply because there will be a direct and strong competition: Research shows that cannabis is helping cancer and epilepsy patients fight these diseases. If cannabis were to be declassified today, the industry would be worth $38.6 billion.

 

Companies to Invest On

Currently, the options open to investors are limited to a small number of biotech companies listed on the NASDAQ, including GW Pharmaceuticals, Insys Therapeutics, Cara Therapeutics, and Zynerba Pharmaceuticals. These are some of the stock I personally own. While I own other non-Cannabis related stocks, “420” companies below have been performing incredibly well.

 

  • GW Pharmaceuticals (Ticker: GW) was founded in 1998 and is located in both the United State and the UK. They are the leading developer of cannabinoid drugs. Epidiolex is their lead product candidate and it is geared toward certain kind of drug-resistant forms of epilepsy.

 

  • Cara Therapeutics (Ticker: CARA) is a biotechnology company that is developing cannabis-based products to target the body’s peripheral nervous system. Their lead drug, known as CR845, will work primarily as an intravenous drug for hospital use. CR845 is currently in Phase III of its clinical trials.

 

  • Insys Therapeutics (Ticker: INSY) is a pharmaceutical company that develops and commercializes supportive care products. They currently have two FDA-approved cannabis-based drugs available with seven more pending; one helps ease the pain of cancer patients and the other is a liquid administered orally to help with extreme weight loss from AIDS.

 

  • Zynerba Pharmaceuticals (Ticker: Zyne) is a pharmaceutical company that develops and commercializes developing drugs that will help patients battling health conditions like epilepsy, fibromyalgia, and more. Their development pipeline includes cannabinoid products that will produce new treatment options for patients who are currently not receiving adequate pain relief.

 

More research on the cannabis industry can be found from companies such as the ArcView Group, Viridian Capital Index, and the MJIC Marijuana Index.

 

Don’t let fear take over. You might not know enough about how to invest in the stock market, however, you can learn by reading.

 

For tech & money tips, follow me on Twitter and Instagram @monicataher

 

 

 

 

 

 

 

Share this article -->Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInDigg thisShare on RedditPin on PinterestEmail this to someone

2 comments

  1. Jamie Patrick says:

    I wanna start with a broker I’m looking to buy in on some of cannabis stocks I only have $ 100.00 to work with and wanting to know if these stocks that are available long term or short term also I’m looking for stocks that offer dividens is there any of the OTC stocks available on NASDQ and if the OTC are ones to stay away from?

    • Mónica Taher says:

      Hello Jamie –

      Check out GWPH, CARA, INSY, ABBV, ZYNE, CGC.V, TWMJF, OGRMF. SOme of them are OTCs, however, none of them offer dividends. I am afraid that $100 will make a significant impact even if you buy penny stocks such as CGC.V since the stock is not necessarily fluctuating aggressively. Good luck!

Leave a Reply

Your email address will not be published. Required fields are marked *

Twitter

Categories

Find an Article