The Risks and Rewards of Investing in Marijuana Stocks

Investors rarely have the opportunity to get in on the ground on floor of an industry poised to see incremental revenue growth for decades to come. The last time investors had this opportunity was during the tech boom, which created countless millionaires.

Technical420 expects to see this happen through the expansion of the multi-billion dollar legal cannabis industry, which is not even in the first inning of what will be a multi decade growth cycle. The marijuana industry, like the tobacco, alcohol, and gaming industries is a defensive industry that is recession-resistant. This means that the strength of the economy, whether good or bad, will not impact the demand for these products.

People drink to celebrate, to relax, or to deal their problems. People gamble when they feel lucky or when they are trying to change their luck. Cigarettes will continue to be purchased no matter how dangerous they are. Marijuana is no different.

Nobody knows for sure whether investing in marijuana will be as lucrative over the next decade as tobacco, alcohol and gaming stocks. Our comprehensive industry report projects the cannabis industry to be a $500 billion industry by 2030. Although, this potential creates a huge opportunity for investors, new industries come significant risks. The developmental nature of cannabis companies, as well as lack of historical data amplifies this risk. The cannabis industry also faces a number of important legal hurdles.

If you decide to add marijuana stocks into your investment portfolio, you need to have a plan and you need to select investments accordingly.

Consider the source of information

There are more 250 publicly traded cannabis companies and most of them will dissolve or shut down over the next two years. Since, the emergence of the cannabis industry has created opportunities for fraudsters, investors need to do their due diligence before investing in a cannabis company. Investors need to evaluate the source of information before acting on it.

Some of the factors you should look into are:

• Relationship between the information source and the company: The first thing any potential investor should do is read the disclosures to see if the information source was paid by the company to release the information. Potential investors should check the disclosures to see if the entity that released the information owns shares of the company. Doing this will help you determine whether the information is legitimate.
• Track record of the company that released the information: You want to follow a trusted source of information. Do not invest just because you read something positive on a message board
• Look into the company: Specifically, who makes up the company’s management team, does the company generate revenue, how many shares are outstanding, what exchange do they trade on, and what has the company accomplished over the last year?

Outlook

Technical420 is an independent provider of cannabis stock research and analysis. We do not accept money from companies for favorable ratings and no employee is allowed to own any cannabis stocks. These rules are in place so that Technical420 can provide investors with non-biased, accurate and independent research.

Visit us at www.Technical420.com

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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