The Hottest Medical Marijuana Stocks
It’s high time to talk medical marijuana stocks, one of the hottest sectors so far in 2019 …
The conditions are just right for medical weed stocks to explode. We’re talking huge catalysts, like the Farm Bill passing, which will likely lead to CBD moving to much larger markets.
There’s also Canada’s recent legalization of marijuana. And more and more U.S. states are approving it medically, recreationally, or both.
That means there are a lot of emerging companies gaining huge traction in the market.
As a trader, how can you intelligently approach this trending sector? What stocks should you be looking at? What should you expect from medical marijuana stocks in the year ahead?
In this post, I’ll dig into what’s happening right now with medical marijuana stocks, including how to locate stocks to trade and what I’m looking forward to in this sector in 2019.
What Are Medical Marijuana Stocks?
There’s a lot of misunderstanding about marijuana stocks, so let’s clear the air. What are pot stocks, and how can you identify them?
To understand medical marijuana stocks, you need to pause and understand what medical marijuana is first.
Medical marijuana is marijuana that’s specifically used to treat medical conditions or diseases.
Marijuana is made up of a slew of different chemicals. And there are two key chemicals that are used medicinally:THC (short for Delta-9-tetrahydrocannabinol) and CBD (short for cannabidiol).
Harold and Kumar fans will recognize THC as the component that induces the high feeling that pot is so famous for.
CBD, on the other hand, is becoming more popular. It has the same medicinal qualities but lacks the psychoactive effects.
Believe it or not, marijuana wasn’t just discovered in the 1960s. It’s been around for centuries. From the 1850s to 1940s, it was even listed in the US Pharmacopeia (also called the USP) as an acceptable medical product.
Marijuana was regularly prescribed for illnesses ranging from gout to migraines to … yep, even intestinal worms in the 1800s and early 1900s.
But in the 1930s there was a big campaign to make medical cannabis illegal. It was successful, and cannabis wasn’t a huge part of the public eye again — until hippies discovered it as the ultimate party starter.
That’s been changing in recent years … the benefits of medical marijuana are newly re-discovered and touted for helping to alleviate symptoms from cancer, glaucoma, and more.
Medical vs. Recreational Marijuana
Not all marijuana use involves queuing up “Bill & Ted’s Excellent Adventure” and breaking out the Doritos. Here are some of the key differences between medical and recreational marijuana:
You need a doctor’s note.
To get medical marijuana, you need a recommendation from a doctor. With this recommendation — which needs to be updated periodically — you can go to an approved dispensary and purchase product.
The product may be different. Sometimes, medical marijuana has less THC than recreational marijuana, since the goal isn’t necessarily to get high. Often, it has a higher level of CBD than recreational marijuana.
Medical marijuana is available in more places. Recreational marijuana is approved and legalized in 10 U.S. states (plus Washington D.C.). But at this point, it’s still less common than medical marijuana, which is available in 23 states.
So, now that you know medical marijuana a little better, what are medical marijuana stocks?
These stocks pertain to the industry of medical marijuana and might include:
- Marijuana growers:This is one of the most straightforward types of marijuana stocks, offered by growing operations.
- Marijuana distributors:These are the companies responsible for transporting the product from growers to warehousing and dispensaries.
- Marijuana dispensaries:Sometimes growers also offer products at a retail level, but sometimes they sell wholesale to dispensaries. This is where people go to purchase medical marijuana. Such establishments may offer stock.
- Medical stocks:Pharma companies are getting hip to the medical marijuana trend. These stocks would be offered by companies developing drugs with CBD or medical marijuana.
- Related products:To grow marijuana, you need supplies. This means that companies offering hydroponic products, fertilizer, and lighting systems can be considered part of the medical marijuana industry.
The Rise of Medical Marijuana Stocks
Medical marijuana stocks are on the rise. There are a few key recent catalysts, including …
Increased interest in holistic healing. Recent years have seen a huge increased interest in holistic medical alternatives. Medical marijuana is a big part of this. People are increasingly digging the healing properties of cannabis, and there’s potential for medical marijuana to branch out — not just into the retail sector but into big pharma and biotech as well.
Legalization in Canada. As of late 2018, marijuana is completely legalized in Canada. Following the legalization, pot stocks enjoyed a huge surge in popularity. Many see the writing on the wall that it’s only a matter of time until the U.S. follows suit.
Prospectors are investing in all kinds of marijuana and related stocks. With a lot of states approving recreational marijuana, there’s increased interest in all pot-related stocks. The confusion around what’s approved and where makes it tricky, though …
The Farm Bill
What does farming have to do with medical marijuana stocks?
The recently passed Farm Bill includes a proposal to fully legalize the production of industrial hemp, a common source of CBD.
Prior to this, CBD lived in kind of a legal grey area. It wasn’t illegal, but it wasn’t exactly legal either. It was mainly available on a smaller scale — you wouldn’t see it in CVS, for instance.
Now that the bill has passed, it likely won’t be long before CBD is available to a much larger audience and produced in much larger quantities.
This means that CBD-infused everything — from medications to beverages — may be on the store shelves in the not-too-distant future. That could have a big effect on stock prices.
Now that you’ve got the basics under your belt, you’re probably thinking “ok Tim, this is great, but what should I be on the lookout for?”
Luckily, I’ve laid it all out for you. Tomorrow I’ll go over what you can expect in this market sector as we move forward through 2019.
It’ll help you position yourself should you decide to tap into this growing market.
— Tim Sykes
Editor, Penny Stock Millionaires