Investing In The Cannabis Industry

I don't mean to be controversial, this is just my opinion, so take it or leave it. I would not invest in the cannabis industry at this time because I would never put my money into something that is so speculative. By speculative, I am meaning that in cannabis, you have an industry that is volatile with winners and losers and financial backers that are constantly in flux. Similar to investing in new tech, and with as much or even more risk, you might win or lose big. In short, it's a total gamble not based on solid balance sheets or experienced board of directors.

Again, not to start any sort of controversy or give out stock tips or anything gauche; I take risks when I invest but I don't gamble. I think the cannabis industry at this time is a total gamble. Anyone could win, anyone could lose. When you gable as an investor you always give the money back in one way or another. Investing is a discipline, so no I don't invest in cannabis.

 

Again, just from my knowledge. I've been an investor for over thirty years, I've persisted through the shit times as well as the good times. I've never been an investor in facebook, snap, beyond meat, uber, lift, google, etc. It would have been cool if I was so lucky to invest in these and make millions and billions of dollars, but, I've learned not to invest this way. The problem here is that the stock prices and actual on-paper value of the company (p/e ratio for instance) is not matched, not even close. In all of those companies listed above, including the marijuana stocks (and the 3-D printing companies - remember those?), there is no actual value, there is just projected value. That's why I call it a gamble and not an investment. No one actually knows anything about these companies except that you think or want them to do well and there's a lot of buzz surrounding them. Like people yelling red and black at a roulette table.

Again, and just from my experience, (but maybe it helps someone and that's great if it does), I look at what a company has in the bank, I look at the track record of who's running the company (who's on the board), I look at what the company would be worth if it were to be sold for "spare parts", and then yes, the last thing to consider is do I want the company to do well, do I think (speculate) it will do well in the future.

Because I don't have a crystal ball, and I've seen the failures time and time and time again with speculative stocks, I am very careful. I remember a time when it was all about the AOLs, Ebays, Qualcomms, Washington Mutuals, Pan Ams, Alcoas -- once they ruled the market, and then one day the bottom fell out (check out the historical prices, it's entertaining). The so called FANG stocks, they are the ones that worked out, for now, but they still don't have financial basis that makes sense considering the stock price. So even though they are rocking, it's still a guess based on how the STOCK PRICE and not necessarily the company's bottom line has performed. There's also no dividend. And, very little diversification into other industries. For me that's a waste of money. Great if I make a million dollars, but I wont. I'm jsut not that good of a guesser.

 

As you probably know mj stocks took a huge hit last year. -40% in some cases more, while most of the stock market was moving up.

I invest simply via ETF. I am well diversified and mj ETF is only about 6% of my portfolio. I bought a bunch last year as the price was dropping and YTD it's about 8% up.

Yeah it's risky, but I hedge my bets and overall I believe that attitude is changing and this industry is going to change drastically... It is certainly not disappearing. If banking regulations allow marijuana businesses to process funds that's going to be a huge win. Needless to say federal regulation would seal the deal.

 

Why pay 300 an oz when you can go blackmarket and pay 100.

Neat concept though. If cannabis really wants to take off. Wait until big pharma gets in on it and spends about 50Billion to takeover and rope, textiles, clothing, shoes, food, paper, bioplastics, insulation, and biofuel.

Cotton, oil, these names will no longer be in our vocabulary, because hemp can make everything go

Sent from my Pixel 3a using Grasscity Forum mobile app

 

I was lucky enough to grab some GW Pharm stock last year when it was low, on Stash, as a beginner. I profited nearly 200% before they sold to Jazz Pharm! I owned it for a year.

I chose not to buy ETFs, because they often pair unprofitable organizations with profitable ones. I only invested in the company that I knew would profit, and used the rest of my 'bets' on other industries. Extensive research for each company was required.

I'm getting ready to move out of Stash and into TD Ameritrade. I highly suggest you check it out. They have a simulation that will let you get familiar with their options. I'm using the simulation to practice my short-term strategies. I hope I can finish practicing within the next month, and start trading short-term options.

I realized that the true risk is in long-term investing. There's no crystal ball in any industry... I watched people who had invested 20 years of time into oilfield stocks freak out last year, too.

The best thing you could do is watch the patterns in time, and don't be too greedy. When you get 200%, take it out, instead of waiting to become a billionaire... Maybe put more money back into the company later, when the price drops again. Get another 200%. It will accumulate.

I am super interested in asking about the companies you chose! I considered Aurora once and will probably look into them again.

Sent from my Pixel 3 using Grasscity Forum mobile app

 

I’ve got small chunks of several individual stocks along with index funds. I understand about taking profits but I don’t discount long term, buy and hold, thinking either.

 

Right, long-term investing can still be a good strategy. If you play the strategy right. You have to be willing to accept that eventually, there will be a year like 2020, when everything takes a huge dip.

I'm trying to diversify my short-term and long-term risks. I'm also looking into bidding out my held shares as contractual options, but I haven't quite wrapped my mind around that, yet.

 

I took a course on options but didn’t much grasp it either. I know how it works but never dug in. I’ve shorted a couple of stocks but not on margin, just bought the drop back. If I weren’t gambling on pot, I’d probably chase dividends in large stocks. More preservation than aggressive growth.
I like to believe that cannabis can grow to cig or booze scale at some point and I hope I can build a small stake in it before then.

 

Maybe you could adapt some sort of hybrid strategy? A balance between preserving large dividends, then using those returns to build your stake in the cannabis gamble? Heck, maybe I'll do something like that...
If you ever start using one of the simulations like TD Ameritrade to practice options, or even decide to dig right into them, feel free to shoot me a DM! I would love to compare what we're learning.

 

The cannabis industry changes quickly, and 2022 is no exception. It seems plausible that progressive legislative changes in the aforementioned countries could start an adult-use legalisation domino effect across Europe, in a similar way to what we have witnessed with medical cannabis in Europe and adult-use cannabis in the US.

 

The problem we’ve has in the US is a bunch of people who will tout “freedom” and stand by while people get arrested for a plant.

 

my future plays a big role for me. I understand that I want to become a successful and financially independent person. I put a lot of effort into this. I studied how to start an llc and it gave me the opportunity to understand in what area I should develop. I am sure that my company will become world famous in the near future