Fundamentally, it’s difficult to argue against the point that legal cannabis is a transformative economic concept. Previously an illegal and thus untaxable revenue stream, it’s now becoming mainstream in North America, not only providing taxes but also creating new jobs. However, marijuana stocks themselves have had a checkered past…
Yes, recently, cannabis-based investments have generally been performing very well. Mainly, this is due to the administration of President Joe Biden. During the campaign trail, he and now Vice President Kamala Harris pledged to decriminalize cannabis, which naturally supports the case for marijuana stocks. In addition, the Democrats have full control of Congress, giving Biden more capacity to push left-leaning policies.
But will this political tailwind be enough to support marijuana stocks? It could be and that’s because of another positive catalyst: the novel coronavirus pandemic.
Because of the worldwide outbreak, many countries ordered their citizens to lock down for a period of weeks or months. This has caused some folks to get a little stir crazy. Moreover, the stress resultant not only from the health threat but to personal finances and daily routines has given new relevance for medical marijuana stocks.
According to data compiled by Health Europa, studies indicate that cannabis may help address stress, anxiety and depression. You don’t need to be an expert to recognize these symptoms across the wider population. Therefore, if you’re thinking about going green, you may want to consider these medical marijuana stocks.
- Innovative Industrial Properties (NYSE:IIPR)
- Tilray (NASDAQ:TLRY)
- Jazz Pharmaceuticals (NASDAQ:JAZZ)
- Cronos Group (NASDAQ:CRON)
- Green Thumb Industries (OTCMKTS:GTBIF)
- GrowGeneration (NASDAQ:GRWG)
- Trulieve (OTCMKTS:TCNNF)
- Cresco Labs (OTCMKTS:CRLBF)
A quick but important caveat: I’m not suggesting that cannabis is a cure for any disease or condition. Indeed, from all the studies that I’ve seen, the data is inadequate to make such definitive connections. At the same time, people are desperate for any solution, particularly natural organic ones. Thus, the investment narrative for medical marijuana stocks is potentially viable.
Medical Marijuana Stocks: Innovative Industrial Properties (IIPR)
Although not a pure name among medical marijuana stocks, Innovative Industrial Properties nevertheless belongs in your cannabis portfolio if you’re serious about this sector. For one thing, before you run, you must first learn how to walk. And IIPR stock has been the voice of reason.
Lifetime, shares have a return of over 1,000%. Since the beginning of 2018, IIPR stock is up over 600%. Essentially, Innovative Industrial Properties has played the role of safe space in this terribly volatile market segment.
As you might infer from the brand name, Innovative Industrial is a real estate investment trust serving the medical-use cannabis industry. To put it another way, IIPR is about selling tickets to the game, not gambling on one particular team to win.
Theoretically, such business models don’t perform as well because of the mitigation effect both to the downside and up. However, you just don’t know where the sector will go. Therefore, you should consider some portion of your portfolio in IIPR.
Among medical marijuana stocks, Tilray is one of the more complicated. As a great example, its latest earnings report demonstrated encouraging results, especially compared to the year-ago quarter. The company reported a loss of $3 million or 2 cents a share, far better than the $200 million loss a year earlier. Additionally, revenue came in at $56.6 million, up nearly 21%.
Still, investors took a dim view on TLRY stock, sending shares down 14% on the day of the disclosure. When analysts dissected the data, they didn’t care for Tilray’s Manitoba Harvest business, which is the world’s largest hemp foods company. During a time when grocery sales skyrocketed due to pandemic fears and restaurant lockdowns, Manitoba’s revenue fell by double digits year over year.
I’m not a strong advocate of catching a falling knife. However, this may be a…
Continue reading at INVESTORPLACE.com