When it comes to deciding a stock to invest in, the easy choice would be to go for a big company, such as Apple or Google. With these two companies being some of the largest in the world, the decision would be a good investment and potentially resulting in a great return. However, an unlikely market that may be worth investing in is the marijuana market. It is a rapidly growing industry, considering the large number of medical advancements being made with cannabis. Investing in stock related to marijuana could be risky, but may result in an excellent pay-off.
Medical marijuana is legalized in 29 states across the US and in all of Canada. From a recreational stand-point, it is legal in few states and is legal in Canada. “The marijuana market in California alone could exceed 7 billion by 2021, and based on states that have already legalized marijuana, the marijuana market nationwide could be worth 25 billion in 2021” (Campbell par.4). When a market is steadily rising and showing promise of astronomical revenue such as this one, it’s not surprising that people want to become involved with stocks for marijuana. Though it may seem like an unorthodox market, and there is still a lot of room for things to go wrong, many companies have found ways to be profitable using cannabis.
There’s a lot of risk in investing in the marijuana market alone, as recent stock prices haven’t been the best. However, there are companies that are using cannabis related products that are doing well. For example, Scotts Miracle-Gro has invested in hydroponics to serve the marijuana market better. As marijuana becomes legalized in more states, Scotts Miracle-Gro’s investment will come back to benefit their profits (Campbell par.12). Once the company entered into the marijuana market about a year ago, they saw their stock rise about 10% (Saintvilus, par 6). Scotts Miracle-Gro is a company to watch, in the past year their stock prices have fluctuated, they got as has high as 99 dollars. Revenues and income, though they have been slightly lower through the quarters have still been high.
Another company that is rising in the cannabis industry is AbbVie Inc, a US pharmaceutical company with cannabis based drugs (Johnston, par. 4). Marinol (one of their cannabis based drugs), and is used for those undergoing chemotherapy and people with aids to help their appetite. AbbVie has increased their operating income and revenues over the past several years. Last year alone, they generated 8 billion dollars in global revenues, and they’re projected to make 47 billion dollars in global revenue by 2020 (Zacks, par.12).
Marijuana is not what it used to be, the stigma of people that smoke marijuana has changed. This has to do with states making it legal recreationally and the amount of medical advancements being made with it. The new view and medical advancements of marijuana are relatively new, however, that doesn’t make it a bad investment. In fact, putting your money into something new is exciting. Maybe one day 20 years from now, the stock of companies that use marijuana such as AbbVie, will be valued as high as google. Getting in on the ground floor of this innovation could potentially be a huge investment.
Campbell, Todd. “The Truth About Investing in Marijuana Stocks.” The Motley Fool. 16 May 2017. Web. 10 November 2017.
Johnston, Kevin. “Top 4 Marijuana Stocks to Watch.” Investopedia. 6 November 2017. Web. 10 November 2017.
Saintvilus, Richard. “Scotts Miracle-Gro Seeks High Profits in Marijunana (SMG).” Investopedia. 13 October 2016. Web. 10 November 2017.
Zacks. “AbbVie (ABBV) Tops Q2 Earnings and Revenue.” Investopedia. 28 July 2017. Web. 10 November 2017.