Despite a massive slowdown in cannabis funding and stock price growth, with many of the largest players within the space largely under-performing the wider market, trading remains hot. In the last 2 yrs, the marijuana industry has seen a lot more than $26 billion in funding deals and M&A.
Beyond the figures, marijuana-related companies have really reached the mainstream, with several big ETFs trading on major stock exchanges. Among them, these trade in the NYSE: the ETFMG Alternative Harvest ETF (NYSE: MJ), the AdvisorShares Pure Cannabis ETF (NYSE: YOLO), the Cannabis ETF (NYSE: THCX), and also the Amplify Seymour Cannabis ETF (NYSE: CNBS).
Further evidencing the mainstreaming of cannabis are companies like weed grower Cronos Group Inc. (NASDAQ: CRON) and cannabinoid-based biotech GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH) listing around the Nasdaq, Canopy Growth (NYSE: CGC) trading in the NYSE, and Acreage Holdings (OTC: ACRZF) going after Super Bowl ads and getting political big guns like John Boehner and Bill Weld aboard as advisors.
we make an effort to keep readers current with the newest news, stock picks, and expert commentary. But, as we continue to obtain the question about how you can spend money on marijuana stocks, we’ve made a decision to put a short guide together for you. Before moving on, it’s necessary for readers to comprehend that purchasing cannabis is not really limited to growers or retailers.
There are numerous companies providing ancillary services to the industry, as well as many derivative plays, like pharma and biotech companies making cannabinoid-based drugs and repair/product providers that used to operate away from marijuana industry but have gotten aboard since legalization.
The Over-the-Counter Issue – While multiple states in the U.S. have legalized cannabis for either recreational or medical uses, allowing companies to thrive, the plant is still illegal on the Federal level – considered a Schedule I drug by the DEA. It has caused it to be hard for a lot of companies to obtain on the Nasdaq or the NYSE.
Seeking alternative avenues to boost capital, many organisations go public in Canadian exchanges, while some have performed so by trading on over-the-counter U.S. exchanges. Because of this many publicly traded cannabis companies are not susceptible to exactly the same level of scrutiny that major exchanges as well as the SEC impose – although those trading around the TSX and CSE are subject to heavy scrutiny.
“The over-the-counter exchanges present challenges. They’re not taken as seriously because the bigger exchanges, and they also enable a better degree of latitude in terms of the expertise of the company that will trade to them. Because of this, most of the companies (…) that have something to do with cannabis probably shouldn’t be there. They got there because entrepreneurs thought it was the only method they might get access to capital; there is somebody which had a publicly traded vehicle that appeared like it zhzvmn be a good fit,” Leslie Bocskor, investment banker and President of cannabis advisory firm Electrum Partners, told Benzinga.
Having said this, he added that does not every OTC or penny stock will be avoided at all costs. “There is actually a prejudice against cheap stocks which i think we must have to escape as an industry and start looking towards reverse splitting our stocks, having fewer numbers of shares and higher prices since the optics on it are better,” Bocskor voiced.