An Update on Weed

It’s been a little over a year since I made fun of your manicured lawn and then boldly forecasted some marijuana investments. Last week I mowed all the weeds in my yard down to the ground in anticipation of some upcoming freezing weather. I won’t bother posting pictures of my crabgrass, but I thought it would be interesting to look at the stocks I highlighted to see if we lost our precious green by investing in weed… 

Recent Events

I can’t read or listen to the news these days without hearing about marijuana. A new state is legalizing its use or someone else is touting its benefits almost daily. Canada just legalized it nationwide, becoming the first G-7 nation to do so. Personally I think that Trudeau character had been high for years, but regardless…

legal marijuana shop
A more an more common site in America

The recent mid-term elections saw medical marijuana approved in Utah (hello… Utah???) and Missouri while recreational weed was approved in Michigan. These states join 31 others that have already gone the medical route, along with nine others that have gone fully recreational. As a result of this action weed stocks have really lit up the stock tickers in recent days.

Back Home

It will probably take a Democrat president & Attorney General before we see legalized weed really catch fire in America via relaxed federal statutes. Bill Lee as governor in Tennessee is going to be very conservative in this regard too, so don’t hold your hopes too high here at home. I think the Republicans will be a bit too hesitant given the evangelical base, no matter how libertarian they may try to bend. That being said, the industry in America has still managed to generate some smoke for sure.

High Society?

On July 2, 2017 I recommended looking at 3 stocks with marijuana exposure and then a marijuana index. Was I high? Or did I manage to score? Let’s take a look…

Horizons Medical Marijuana Life Sciences ETF (TSX: HMMJ) is a marijuana index that offers a broad-based holdings of companies in marijuana industry. I chose this index because I liked its broad diversification across many businesses in the industry. I also like that it trades on the Canadian exchange in Canadian dollars. I have seen my investment go from $9.40/share to $23/share since July 2017. That’s a high flying gain of 145% in 15 months.

Scott’s Miracle-Gro (NYSE:SMG) provides exposure to the marijuana market by way of the fertilizers and growth supplies targeted specifically to the cannabis industry. I bought this stock because they make a wide array of products that cover a wide swath of the agricultural industry, in marijuana and beyond. Growth here, however, has been non-existent and I’ve seen my stock drop from $96/share to $71.50/share for a loss of 25% in 15 months.

GW Pharmaceuticals (NASDAQ:GWPH) is the largest publicly traded biotech company specializing in the development of marijuana-based drugs. I bought this firm because I like the biotech angle and they have several FDA “firsts” in the cannabis industry. I have seen my shares go from $106/share to $137/share for a gain of 29.25% in 15 months.

Canopy Growth Corp (TSE:WEED), is a Canadian supplier of pharmaceutical grade marijuana. I bought this stock because of the marijuana friendly laws in Canada and the fact that I could buy it on the Canadian stock exchange with Canadian dollars. I have seen my shares go from $8.70 share to $53.50/share for a major buzz of 494% in 15 months.

marijuana plants

I still see marijuana investment as a risky “gold-rush” type scenario. You’re at the mercy of intense government regulation (state versus federal policies), changing laws, shifting political winds, and moral majorities. These investments, however, show that the industry has caught fire and can offer you significant gains if you choose your investments wisely. 

This is not a recommendation to buy any of the aforementioned stocks. As of this writing I maintain long positions in the stocks mentioned. Consult the services of a reputable fee-based professional and do your own due -diligence. Oh, and smoke ‘em if you got ‘em… Cheers…

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: