Cashing In on Weed Stocks: Know What to Buy

Matthew Carr By Matthew Carr
Emerging Trends Strategist

Market Trends

Editor’s Note: We’re just going to come out and say it…

You’re all a bunch of hippies.

Recent research suggests that a growing number of seniors are fighting off the aches and pains of getting older with a big bowl of Mary Jane.

And according to the National Survey on Drug Use and Health, from 2002 and 2014, marijuana use among 50- to 64-year-olds increased a staggering 210%.

During the same period, use among seniors ages 65 and older jumped 950%.

As more and more states legalize medicinal marijuana (as is the case in more than half the states and Washington, D.C.), we expect the trend in cannabis usage among seniors to continue.

Today, The Oxford Club’s Emerging Trends Strategist Matthew Carr discusses the most recent trends in the marijuana industry.

To learn which companies Matthew is tracking, click here now.

In recent years, two disruptors have captured the attention of commodities investors: cryptocurrencies and marijuana.

In the U.S., eight states and the District of Columbia have legalized marijuana for recreational use, and it is legal for medical purposes in 28 states. Several more states are now considering legalization.

So more than a fifth of the U.S. population already lives in a state where marijuana is legal, and that number will only grow. Polls show that more than 60% of Americans believe weed should be legalized.

The economic consequences of this trend are eye-popping…

Last year, cannabis sales in Colorado surged 30% to $1.3 billion, making the Rocky Mountain State the leader of the U.S. marijuana market.

It is estimated that the U.S. marijuana market is now worth $6 billion per year, and that is expected to grow to $50 billion by 2026.

In 2016, marijuana stocks were all the rage.

With several states moving toward decriminalization or legalization, investors were on the edges of their seats, their mouths watering in anticipation of federal-level legalization – and the massive boost to sales that would come with it…

But it never came.

The current administration views marijuana legalization unfavorably, and it is unclear what the Department of Justice will do when state and federal laws about marijuana conflict.

As a result, weed companies have seen their shares vaporized.

Weed Stocks: The Big Comedown

I personally track more than 50 marijuana companies…

Here’s what analysts aren’t telling you: Most weed stocks are down this year.

In my weed stock index, 25 companies are down more than 10% so far in 2017. And 16 of them are down more than 25%.

But even those figures fail to capture just how terrible it’s been for marijuana stocks lately…

Axim Biotechnologies (OTC: AXIM) is down about 25% year to date. But shares have fallen 67% from the $19.80 they were trading at in January.

Shares of Zynerba Pharmaceuticals (Nasdaq: ZYNE) are down around 60% for 2017… including a 76% drop from a high in April.

Still, 19 of the companies I track are up more than 10% this year – though five of those started the year trading at less than $0.02 per share.

And some of the stocks that are up are well short of their highs for the year. For example, shares of Cannabics Pharmaceuticals (OTC: CNBX) – formerly American Mining Company – are up nearly 50% this year… But shares are down more than 75% from their high of $7.60 in February.

Shares of Weed Inc. (OTC: BUDZ) have gained about 8% in 2017. But they’re down around 80% from their February high of $5.05.

Of the more than 50 weed stocks in my index, the total return is a loss of nearly 13% in 2017. And that includes the 1,500% gains for the true penny pot stocks that started the year trading at $0.01.

There are winners, of course. But investors who expect the U.S. government to soon end its 80-year federal cannabis prohibition are chasing a pipe dream.

However, don’t lose hope. It’s the dawn of a new industry.

But for every opportunity, there are twice as many dangers. Investors simply can’t charge into this sector with guns blazing.

Don’t be blinded by the haze of “penny pot stock drama.” The truth is, there are opportunities to make a great deal of money through investing in weed stocks over the next several years… but you will have to find the right ones.

And there is one market in particular that I think marijuana investors must focus on for success…

To learn more about the new law that will open up a $22.6 billion market within the next 12 months, click here.

Good investing,