Across the United States, the support for legalized recreational marijuana is increasing. This support is reflected in changes to states’ laws regarding the use of cannabis. At the beginning of 2018, California joined the list of states in which the recreational use of pot is legal. These legal changes are reflected in the markets, showing support for and interest in pot stocks. As of early 2018, eight states and the District of Columbia have legalized recreational marijuana, and cannabis is legal for medical purposes in 29 states. Nevertheless, marijuana remains illegal at the federal level.
Some political machinations by the Trump Administration has put a damper on enthusiasm for cannabis stocks.
Attorney General Jeff Sessions is reportedly intent on rescinding an Obama-era rule that encouraged federal non-interference in state marijuana law enforcement. This means that, despite some conservative protestations regarding “states’ rights,” a state’s right to legalize recreational pot is currently under fire. Whether this will impact the marijuana legalization movement, or whether Attorney General Sessions is just blowing smoke, has yet to be seen.
This political climate has understandably caused some investors to question whether MMJ stocks or cannabis stocks are wise investments.
However, the fact remains that the marijuana legalization movement has inspired hundreds of startups. Although some of these businesses will be destined to fail, just as a matter of mere business statistics, some could likely thrive. Another issue to consider, though, is that a federal crackdown on marijuana, even if it is legal at the state level, could increase the probability that weed-based startups will neither thrive nor survive the Trump attack on legal recreational and medical marijuana.
Nevertheless, some companies are clearly leading this industry. In this article, we will discuss four weed stocks in which you might consider investing.
One company’s weed stocks to watch is AbbVie, a pharmaceutical company that already has a cannabis-based product on the market, Marinol.
The Food and Drug Administration approved Marinol, a drug that helps alleviate nausea and/or vomiting in chemotherapy patients. Marinol also helps AIDS patients who have undergone loss of appetite as a result of their illness. Marinol is not AbbVie’s flagship drug, or even the drug that generates the most revenue for the company. However, Marinol still promises to be useful and continues to set AbbVie apart from its other pharma competitors.
Because Marinol is not AbbVie’s biggest drug, the company can take part in the medical marijuana market without being entirely tied to it. Thus, AbbVie can be considered a pot stock, but, the company is not solely linked to cannabis.
The Scotts Miracle-Gro Company, like AbbVie, is tangentially related to the marijuana industry, but, it is not solely a weed stock.
The Scotts Miracle-Gro Company is well known for its lawn and garden-care products, and the company is currently developing products for cannabis growers, including pesticides for use on marijuana plants. Thus, for investors bullish on marijuana stocks and The Scotts Miracle-Gro Company’s more traditional core businesses, this might be a great investment opportunity.
Corbus Pharmaceuticals Holdings, Inc., is another related pot stocks company worth considering.
While this stock has seen some dramatic ups and downs over the past year, it is bolstered by Corbus Pharmaceuticals’ marijuana-based drugs. These drugs are clinical trials, which is promising. Corbus Pharmaceuticals’ lead drug, anabasum, formerly known as resunab, is designed to treat sclerosis, and has had promising trials. So far, Phase 2 data shows that anabasum’s effectiveness in treating the inflammatory disease dermatomyositis.
Corbus Pharmaceuticals’ MMJ stock tends to dip before trial results are announced and then rally once the trial results are shown to be positive. For individuals interested in MMJ stocks, Corbus Pharmaceuticals Holdings, Inc., might be a good investment.
Lastly, investors interested in pot stocks should pay attention to INSYS Therapeutics, Inc.
Although this company markets mostly non-marijuana drugs, INSYS Therapeutics is developing a synthetic cannabis drug designed to treat childhood epilepsy. Specifically, INSYS Therapeutics is working on a spray technology that would deliver pharmaceutical cannabinoids, thus changing the drug’s usual method of delivery and improving patients’ options with respect to drug therapy. In late 2017, INSYS Therapeutics saw a sharp breakout, doubling in value as the new year approached. The stock market is volatile; and, specifically, cannabis stocks are especially so. However, for investors interested in biotech stocks, INSYS Therapeutics might be a good option.
For an investor who is tolerant of volatile markets, marijuana stocks might be a great addition for your investment portfolio.
We cannot predict whether Attorney General Jeff Sessions’ announcement of an intended federal crackdown on legal marijuana use will translate into a repeal of state-level laws regarding legalization. However, nationwide, support for legal medical or recreational marijuana has increased over the last several years. That support dovetails with biotech companies’ research into cannabis-based therapies and also plant care companies’ increased interest in creating cannabis-related products.
(To learn more about investing in weed stocks, read Which Pot to Pick? Marijuana Stocks to Watch in 2018.)