Can You Get Rich Off Marijuana Stocks?
Welcome to Episode #66 of the Zacks Market Edge Podcast. Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. In this episode, Tracey is joined by David Bartosiak, the host of Zacks Live Traderand also the Editor of Zacks Momentum Trader and Home Run Investor. 25 states now allow medical marijuana use and 4 states, plus the District of Columbia, allow recreational use. The market for marijuana and its products is expected to explode to $20 billion a year in the next several years. Of course, investors are wondering: how can I cash in on the pot craze? A few years ago, there were a lot of smaller companies that seemed to be promising like Growlife Inc. (PHOT). But most of those early adopters are now trading on the OTC markets for pennies. Dave and Tracey look at a couple of new ways to play the marijuana trade. 3 Stocks That Are in the Pot Business 1. Innovative Industrial Properties (IIPR) went IPO in late 2016. This REIT buys buildings and leases them to growers of medical marijuana. It’s so new there’s no Zacks Rank and no analyst estimates yet. It has a market cap of just $62 million. 2. GW Pharmaceuticals (GWPH) is everyone’s favorite in these marijuana stock articles. This British-based drug company is developing a cannabis-based drug to treat epilepsy. The good news is that it has passed three Phase 3 trials. The bad news is that it hasn’t yet submitted its NDA. 3. Scotts Miracle Gro (SMG) has spent $500 million in marijuana products and is the furthest along in actually having products to the market. It’s already selling the “Black Magic” potting soil, specifically designed for pot plants, in 141 Home Depots. It also hopes to be first to the market with an acceptable pesticide. But other than these three companies, Tracey and Dave had a hard time in coming up with other stock picks with decent fundamentals. Dave extended his search to Canada where he found Canopy Growth (TWJMF) and Aurora Cannabis (ACBFF) on the pink sheets. Canopy also trades on the Toronto Stock Exchange. But there’s little information in the United States about these companies and they aren’t ranked Zacks.com. What do Tracey and Dave really think about the marijuana stocks? Are they a fad? Or is there a real opportunity there? Tune into this week’s podcast to find out.