Diversifying your portfolio with marijuana stocks inside your IRA can help investors ride the rising green wave, so knowing more about these companies can potentially improve your IRA investment allocation.
In this article:
- Why Invest In CBD Stocks?
- Investing In US Hemp Stocks
- List of Marijuana Stocks
- Marijuana Stocks in NASDAQ
- Marijuana Stocks in the NYSE
- Not Everything Is Green Though
- How To Invest In CBD Inside Your IRA
Marijuana Stocks Inside Your IRA 101
Why Invest In CBD Stocks?
Market leaders and experts project that the demand for cannabis-related products can rise to $24.1 billion by 2025, according to a Statistica report. That number is a very large leap from the $6.7 billion market value for marijuana and cannabis-related sales in 2016.
As of December 2018, only 10 states, plus D.C., allow the recreational use of marijuana. Medical use of marijuana, on the other hand, is legal in 32 states.
Market leaders also see the growth potential of marijuana stocks. Business Wire, operated by financial giant Berkshire Hathaway, reports social acceptance and financial growth for the green industry.
Politicians have also moved more towards legislation, in spite of their parties and ideologies. Washington Post has taken notice of the growing political will for further legislation.
Society can also see a vast improvement. Investments in the cannabis industry also provide low to high skill job openings and also both state and federal tax revenue.
Business Insider posits that the investing in the green industry will bring approximately a million jobs by 2025. With the new inflow of money, the government can also see an increase of $132 billion in its coffers.
Corporate leaders, politicians, and workers can see the benefits brought by marijuana companies. With growing acceptance, the opening of the population to the green wave can come sooner rather than later.
However, do not allow your investment to go up in marijuana smoke. Always perform due diligence and research the fundamentals of a company.
Having marijuana stocks inside your IRA requires analysis and preparation.
Investing In US Hemp Stocks
First, a disclaimer: this list is in no way an exhaustive list of all marijuana companies that a stock exchange can offer. Investor’s Business Daily lists these as the ones to watch as cannabis investing takes off.
To make up for the lack of quantity, this list features more of the publicly traded marijuana companies that have interesting characteristics.
Adding marijuana stocks inside your IRA, whether Roth or Traditional, can give many benefits, and one of the best investment characteristics is in investment diversity. Most marijuana stocks operate in at least two sectors, medical and food, which helps in having a diversified portfolio works best.
The list contains Canadian securities since some Canadian cannabis companies have market presence in the US.
In the same vein, some American cannabis companies have also gone public in Canada, so there is a good crossover of economic power and robust and interested markets.
A self-directed IRA can invest not only in marijuana stocks but also cannabis farms and dispensaries.
However, do note that opening a marijuana farm and dispensary have their requirements and, while lucrative, can cost a lot in start-up capital.
List of Marijuana Stocks
A Canadian company, the Canopy Growth Corp (NYSE:CGC) is a marijuana company with a market capitalization of $10.5 billion as of December 14, 2018.
A limiting factor of growth for CBD businesses lie on production capability. If supplies cannot keep up with demand, customers move to a different provider.
CGC has a competitive edge with supply, especially with medical marijuana. CGC has more than 2.4 million square feet in its eight grow sites.
For those looking to invest in American companies, Medical Marijuana Inc (OTCMKTS:MJNA) has the potential to offer a good return.
MJNA is the first publicly traded marijuana company in the United States. In March 2009, MJNA went public and had seen growth in its 9 years of operations.
MJNA is also the first marijuana company to publicly deliver CBD and other products in all states and around the world.
For investors who want to diversify holdings by having two companies supporting each other, then the CRONOS-MedMen partnership may sound like a good idea.
CRONOS Group is another Canadian company that deals with the farming and production of CBD products. On the other side of the coin, MedMen is a Californian retailer that primarily deals with marketing and distribution of CBD products.
Marijuana Stocks in NASDAQ
For the investors looking for a NASDAQ company that operates in the pharmaceutical industry with the green sector, the medical cannabis research company TILRAY can add diversity.
TILRAY (NASDAQ:TLRY) performs not only state of the art research and development for pharmaceutical needs, but also cultivation, production, and processing of cannabis.
Another company to keep tabs on is Atlantic Alliance Partnership Corp (NASDAQ:AAPC). They have recently merged with Kalyx Development, a leading real estate investment trust in the US.
The merger combines two excellent market players in their respective industries. The expertise of production and distribution of Cannabis by AAPC with the real estate focus of Kalyx Development can add value to all shareholders.
Investors looking to diversify in agriculture and pest management with cannabis may find Marrone Bio Innovations (NASDAQ:MBII) an interesting pick.
They say that the ones who get rich in a gold rush are those who sell shovels. MBII is serving the green industry by helping marijuana growers and processors in this so-called weed rush.
The products of MBII helps cotton and cereal grain growers and users by improving yields and plant health. The company has branched out to the cannabis industry but still remained relevant to the agriculture sector.
Marijuana Stocks in the NYSE
Canopy Growth Corp (NYSE:CGC) is still one of the leading cannabis companies in the NYSE. The Canadian company gained the upper hand when beer market leader Constellation, which operates the Corona Beer lineup, invested $4 billion in Canopy.
Capital is not the only thing Canopy received. CGC also gets a very interesting future lineup.
There are talks about a drinkable cannabis product. With the partnership between the two key players, that product is a possibility in the future.
For those looking for a marijuana company that is older than they seem, AbbVie Inc. (NYSE:ABBV) is an interesting choice. While the company was formally founded in 2013, investors can trace its history from Abbot’s Industries (NYSE:ABT) in 1888.
ABBV is in the pharmaceutical industry and has been providing the world with Marinol since the middle of the 1980s to help AIDS and cancer patients with pain relief and nausea. Interestingly, most health insurance providers can cover for the expenses of Marinol, while most CBD-related products are not.
Due to its first mover advantage in medical marijuana use, ABV targets a big healthcare market, particularly AIDS and cancer patients looking for relief.
Not Everything Is Green Though
While the currently growing political will for marijuana acceptance bodes well for the business, there are still some obstacles regarding growth.
Just like any new “hot high-growth” topic, there are scams in the emerging green sector, according to the SEC.
To protect valuable assets, minimize potential headaches by researching the companies provided.
How To Invest In CBD Inside Your IRA
Want to learn how to invest in marijuana inside your IRA? Get our free guide here!
Marijuana stocks inside your IRA can add the diversity a portfolio needs to manage both complexities and profit correctly. However, like any investment, prudence and research are important factors for a good investment philosophy, so always immerse yourself with knowledge and analysis.
Do you have other marijuana stocks in your portfolio that are not part of this list? What are your projections about the growing marijuana industry? Which state do you think will legalize marijuana next? Let us discuss in the comments section below.