Money DOES grow on trees: Cannabis Investing + 4Rs
“Money doesn’t grow on trees.”
While that quote has been around for eons, it seems to changing a bit. Money is starting to grow on trees, but the type of tree is what is gaining the eyes of many.
Marijuana. Pot. Weed . Ganga. Chronic. Reefer. Mary Jane.
But in the markets - they call her Cannabis.
With states and now the country of Canada making it legal - many corporations have been making strides to incorporate green into how the flip green.
Some folks are hip into how the stock market works, but feel that with Cannabis being on the market ticker that it makes things change. Nope. Same ish, different sector. So what makes some investors, theorist or watchers feel that this type of investment is different than Amazon or Google? The core of the spectator notion is due to it being so freaking new. But to connect it back - Amazon, Google and Starbucks were once new as well. Any fund/company listed in the markets were once the new kid on the block. The market just has a bit of green sprinkled on it now.
Investing is a marathon, not a sprint. If you are into sprinting, you are trading. Difference.
Just as any stock/funds that you are looking to add to your portfolio: Research, Revenue, Residuals and Risk.
Research: Pull the receipts of those companies that you are adding to your portfolio. You are the CEO of your portfolio, background check your employees: What is their P/E, Prospectus/Historical Stock (index) Price, Leadership, Ideas, etc.
Revenue: Will this stock purchase make you see green? With investing you have to not just look for short term gain, but long term range. Gather insight into previous earnings reports to know if this company is making money or just talking.
Residuals: Or dividends in this case. Within your portfolio it is great to have both assets that allot you to gain kick backs now and later while having the Pink Star Burst mentality.
Tea/Tip: You can still earn value on stock purchase beyond it gaining you dividend right then or not. Always keep eye out on your stock value as well!
Risk: While investing has been around longer than some companies - the markets have always held a risk. This time there is no different. So many triggers can pull or push the markets in any direction. It goes back into your tolerance and financial objectives with investing. I know your risk/reward ratio.
Now back to the other green: Weed. Currently right now the heaviest stocks/funds are held in Canada.
While there is no real science to buying weed stocks, you do need to know the some of core funds in the weed market:
Other forms of Supply
Each of these funds have been making waves among the top 100 companies in the BI cannabis index. Yes, you read that right - over 100!
If you want to hop on the smoke train and get into investing in weed without the ‘risk’ - gather you up some Marijuana - focused ETFs. What are ETFs? There will be a blog post on this topic, but in short like an assorted mix of funds in one. You know how grabbed those bundle packs of chips/snacks for one great price? That is what a ETF is.
Here are some strong ETFs within the Cannabis market:
Horizons Marijuana Life Sciences Index (HMMJ) // Started in 2017
ETFMG Alternative Harvest (MJ) // Started in 2015
Purpose Marijuana Opportunities Fund (MJJ) // Started in 2018
Evolve Marijuana (SEED) // Started 2018
Horizons Emerging Marijuana Growers Index (HMJR) // Started 2018
Tea/Tip: Always look at the holdings in ETFs to know how the companies perform and if you want to buy even more of a specific stock.
Now another thing that folks aren’t talking much about are those companies looking to add cannabis to their ‘roll’ of product offerings. Don’t just purchase solely weed-index funds/stock - look into other way to beef up your asset allocation (portfolio mix). Some of the major corporations doing this are Cocoa-Cola, Molson Coors Brewing Co and Constellation Brands, Inc. Also look into how the industry works. What does it take to make weed-based products? Think bigger. Even celebrities are getting in on it with investing through their VCs.
Cheap weed might not be what to blow money on, but cheap weed stock is. Many of them now are roughly under $50/share, so now is the time to snatch and stock. Heck, Hexo is trading under .50 cent! You read that right, less than two quarters. While these funds/stocks are crazy cheap due to the dip in the market, these are the types of funds you hold and grow them. Like a weed farm, plant those seeds… give them time to shine (growth) and watch what blooms!
In late 2018, the market for weed stock grew crazy and brand got a high off of it. While the market is taking a dip, take advantage. As history (or prospectus) shows for various indexes/ types of stock - the high will come around after this passes. Too many puns?
How much pot can it grow?
With the legalization of weed continuing to grow like a dispensary, I honestly don’t see this type of investing going way. It might trend up or down, but the impact will be one that last for a good while. Create list of those lower priced funds/stocks ( Cronos Group Inc.// CRON, India Globalization Capital, Inc.// IGC, OrganiGram Holdings // OGRMF, Innovative Industrial Properties// IIPR, etc)*.
*Not all brokerages and investment platforms trade cannabis stock, just keep checking as the popularity grows.
One of my favorite personal quotes states: “Perspective determines Position”…. I guess money does grow on trees, marijuana trees that is.