It wasn’t long ago when investing in marijuana meant giving your buddy money for seeds, grow lamps, and bail money for when he would inevitably get caught with weed and go to jail. Times are different now.
8 states have legalized the use of recreational medical marijuana while 28 states have legalized the use of medical marijuana. The change of opinion by the general public regarding marijuana and the level of social acceptability has also created a profit opportunity.
It is difficult to argue with the growth rate of MJ stocks over the last few years. Marijuana penny stocks have seen some of the highest growth rates of any stocks in recent history and we don’t see that growth slowing down any time soon. In fact, some of the best marijuana stocks to buy have been lower-priced cannabis penny stocks over the past couple of years.
Below are the top 10 pot stocks to watch that have the potential to double or triple in 2023. As medical marijuana continues to become more accepted and legalized around the country, medical MJ stocks will continue to gain popularity and recognition from the rest of the stock market. Also, pay attention to the hype around the cryptocurrency trading trend in 2023. This could be like trading marijuana stocks in 2016!
Why People are Investing in Marijuana Stocks
The next gold rush will get its investors higher than the pot that is creating the opportunity for profits. This new medical marijuana market could be worth upwards of $21 billion by 2020 according to some estimates. Do you have your favorite marijuana penny stocks picked out yet?
The process of selecting the best cannabis stocks to invest in starts with doing some research on the current state of affairs for this delectable marketplace. Colorado was the first state to legalize recreational marijuana and sales for the fiscal year ending June, 30th 2016 exceeded $1 billion for the first time in US history. The growth of Colorado’s medical marijuana and recreational marijuana is projected to more than double by 2023.
Market experts differ regarding projections for growth in the marijuana market as well as which are the best stocks to buy in the marijuana niche. The one thing they all agree on is that the marijuana market is a multi-billion dollar titan of growth that has not been seen in the stock market for years. Some advisors, including Matt Karnes from GreenWave, estimate the compound annual growth rate for the marijuana sector to be pushing 35% by the year 2023.
35% per year is an incredible projection, but this doesn’t come close to some other market analysts who are projecting that the market could climb higher than $50 billion in the next 10 years provided that marijuana is legalized on a federal level.
Here are The Best Marijuana Stocks to Buy in January 2023:
OTCMKTS: AMMJ ($.1047)
AMMJ Stock– American Cannabis Company Inc. is a consulting firm that provides an all-in-one shop for the budding entrepreneur. They have multiple years of experience in helping marijuana companies grow from the ground up. On top of the setup phase, marijuana companies go through, American Cannabis also provides marketing, branding, and staffing solutions for their customers.
With the increasingly positive sentiment on marijuana in the United States, this company is positioning itself in an industry that will continue to gain popularity.
OTCMKTS: INM ($1.54)
INM Stock– InMed Pharmaceuticals Inc is a drug development and commercialization company uniquely focused on the therapeutic potential of cannabinoids. They developed a proprietary bioinformatics assessment tool, which is a screening tool that helps match rare cannabinoids with potential uses. In other words, InMed can select specific cannabinoids that might play a role in regulating specific diseases. The advantages of the process that InMed has set up are significant time savings in drug discovery and target validation, allowing them to research on 90+ cannabinoids, and identifying multiple therapies.
The 3 therapeutic areas InMed currently are focusing on are:
1. Epidermolysis bullosa, which is a rare skin disease with no current approved treatments.
2. Glaucoma, which is a serious eye disease leading to blindness.
3. Pain Program, which is peripheral pain such as joint and muscle disorders.
All three of these therapeutic areas have a possible $15.5 market potential if InMed can get through the clinical trials.
OTCMKTS: CBWTF ($.1837)
CBWTF Stock– Auxly Cannabis Group, was a cannabis royalty company that provides growers with up-front capital to expand their capacity in exchange for a percentage of their yield at a well-below-market rate. However, with the declining price of marijuana due to the legalization of recreational weed, Auxly had to evolve to stay alive in the industry. Therefore, on top of the royalty streams established, they have expanded into wholly-owned grow farms (which are expected to produce 170,000 kilograms of cannabis in 2019 and 2020), value-added services and products, and downstream retail-focused operations.
OTCMKTS: FFNTF ($1.04)
FFNTF Stock– 4Front Ventures is a cannabis-focused private equity firm that invests in and leases licensed cannabis cultivation and growing facilities. The firm currently owns two cultivation facilities and one production and distribution facility all in the State of Washington. This is an interesting and unique marijuana stock that has the opportunity to capture the growth of the industry while remaining less volatile than the fragmented public marijuana market. With operations only on the Western seaboard, Cannex recently formed a partnership with 4Front, Inc. which operates in 4 states on the Eastern side of the United States. 4Front currently has 5 dispensaries and plans to open 5 more in the first half of 2019.
OTCMKTS: ALEAF ($.1983)
ALEAF Stock– Aleafia Health has grow farms currently under construction, as well as medical cannabis clinics operating under the Canabo Medical Clinic brand. They have applied to be listed on the NASDAQ, but due to its size and ongoing acquisition, it is unclear if they will be let into the major stock exchange. One thing that makes Aleafia Health attractive is they are in the midst of acquiring Emblem (NASDAQOTH:EMMBF), which is a marijuana company that focuses on clinics and grow facilities. If the acquisition gets approved, the combo would have 60,000 patients spread across 40 medical clinics and would be capable of producing 138,000 kilograms annually.
OTCMKTS: MMNFF ($.2404)
MMNFF Stock– MedMen Enterprises Inc is often referred to as the “Apple Store” of legal marijuana dispensaries. MMNFF is a vertically integrated cannabis company with 18 licensed facilities across the cultivation, manufacturing, and retail segments in California, New York, and Nevada. The company raised $38 million from Captor Capital in February 2018 and then another $110 million through a reverse takeover, for a total post-money valuation of $1.65 billion. With over $150 million of growth capital raised to date, MMNFF has a lot of institutional horsepower behind it. The company will report its Q2 2019 results in February, looking to continue the momentum after posting 40% QoQ growth in Q1. Keep an eye on the quarterly results and more importantly the cash flow statement.
MRMD Stock– MariMed Inc. provides consulting services for the design, development, operation, funding, and optimization of medical cannabis cultivation, production, and dispensary facilities. The company also develops and manages facilities for the cultivation, production, and dispensing of legal cannabis and cannabis-infused products under the Kalm Fusion brand name. In addition, it offers legal, accounting, human resources, and other corporate and administrative services.
Investing in Marijuana Penny Stocks
Risks to the Marijuana Market
The marijuana industry has been on a crazy ride ripping higher over the past couple of years. Marijuana penny stocks have seen amazing gains that are only comparable to the dot com gold rush back in the early 2,000’s. As we said before, industry analysts are predicting this growth trend to continue over the next decade. The marijuana penny stock market is not without risk, however. Below are a couple of reasons to be careful with your portfolio investments. Don’t forget to lock in some penny stock gains with these picks as they fly higher!
Pot Stocks Can’t Get Bank Accounts
Financial institutions ultimately answer to the US government when it comes to their clientele. As of this writing, marijuana is still an illegal substance according to federal law. This means that sells marijuana is technically in violation of federal law which would prohibit them from the ability to open a bank account. Marijuana companies are forced to deal with straight cash homie and that can be a problem.
Cannabis Stocks Can’t Take Normal Tax Deductions
This is a bit of a piggyback on the last negative item here. Due to the fact that these marijuana companies are selling an illegal product in the eyes of the federal government, they no longer qualify for the standard tax deductions that businesses that do not sell drugs qualify for. Uncle Sam is like that friend who brought 3 Zimas to the party and left when the music got too loud.
Even the Best Pot Stocks Are Losing Money
This industry is very young and a lot of these stocks are valued based on the hype of future revenue and not the current state of their cash flow. This is no different than the tech boom of the early 2,000’s. We saw what happened there….some companies figured it out and became titans of the industry while others left the market when the music got too loud. Even the largest marijuana stock of all, GW Pharmaceuticals (NASDAQ:GWPH) has a fantastic drug called Epidiolex which is intended to reduce the frequency of seizures in children but won’t see profitability for years to come.
Most Pot Stocks Are Penny Stocks
Now…this is not necessarily a negative thing. We just need to understand what we are dealing with. There are some stocks that are meant to be invested in and some that are meant to be traded. If you confused these two things you may end up losing your shirt and possibly more.
Jeff Sessions is Not a Fan
This may be the most crucial aspect of the marijuana penny stock debate. Jeff Sessions is not a fan of the medical marijuana industry and we will need to wait and see how much of a stance he takes against weed stocks. There is a lot of momentum on the side of legalization at the moment so if you are a cannabis stock investor there is no need to panic. Stay alert and make sure you have your trade plan in place.