Risks but Marijuana Penny Stocks Smart Choices For 2018

blue-bulls

There’s Still Risk Involved With Marijuana Penny Stocks, But Here Are A Few Smart Choices For 2018

If you are thinking about investing, you’ll naturally want to be sure you put your money into a stock that will give you a safe return. Is marijuana such a product? The jury is still out on that because it hasn’t even been legal for very long, and it is only legal in a few states. For the most part, older people and members of the GOP are against legalizing recreational marijuana nationally, but even among seniors and republicans more and more individuals are leaning toward legalization.

Is The Marijuana Industry Considered A Growth Market?

As industries go, marijuana has exhibited very impressive growth over the last couple of years. There are very few markets that can offer the sizable returns projected for marijuana. Some companies listed on the NASDAQ have experienced as great as 1200% increase. Others that are currently manufacturing and selling medical marijuana regularly experience increases between 300% and 1000%. These large and steady increases provide good motivation for small and large investors alike.

Projected Growth Of The Marijuana Market

On top of the demonstrated growth of this new and exciting market, the projected growth (35%) provides, even more, reason for enthusiastic investment. In 2016, the market reached a record high of a little below $7B. That number was expected to increase to as much as $10B by the end of 2017. Long term growth projections indicate that legal marijuana sales should reach $50B annually as soon as the close of 2018 and certainly by 2026.

These projections are reliable because they are based, in part, on the steady increase in the number of Americans who believe that recreational marijuana should be nationally legalized. At the end of the 20th Century, only about a quarter of Americans thought legalization was a good idea. Today, that number has increased to more than 60% and growing. It’s easy to see that national legalization of recreational marijuana is an idea that will surely be met with a great deal of public support.

How Are Marijuana Stocks Traded?

Because of the market caps and price requirements associated with both NASDAQ and the New York Stock Exchange, recreational marijuana stocks cannot be traded in these venues; however, that could change at any time. Today, you can purchase penny marijuana stocks with pink sheets or the OTC. This is an excellent investment because in the past couple of years the OTC has improved in many ways. Today, it’s doing a great job of listing stocks properly and thoroughly reporting all pertinent information.

Even so, this kind of non-traditional investment can be somewhat risky, and in truth, almost all of the penny marijuana stocks available today are still trading at a loss. It’s important to keep in mind that this kind of investment is very similar to those that were available when the Internet was new.

Everything about it was speculation, and people leaped forward in faith to invest large sums of money. As with all new investment ideas, money was both gained and lost. One of the big reasons people lost money investing in the Internet was that it was an all-new idea, so there were no standards. Those who got in on the ground floor may have lost a lot of money, to begin with, but with patience and the passage of time, they recouped their investments and turned a tidy profit.

Monopolies In The Marijuana Industry

These days, there are several small businesses engaged in growing, processing and selling recreational marijuana. Unfortunately, some states have set up laws that favor big businesses and make it possible for them to snatch up all available licenses. This has the effect of freezing out smaller businesses. This could benefit the large companies with the passage of time, but initially, it will result in minimization of profits.

The Best Three Penny Marijuana Stocks For 2018

Top Choice: Nutrafuel (NTFU)

This company is one of very very few ever to be an OTC DEBT FREE companies. The great part about Nutrafuels is they are exactly in the marijuana business. They are first and foremost a manufacturing facility. However, they produce CBD oil for thousands of companies and a network of facilities in the Florida area with them that growth is a no brainer with them.  CBD will only continue to grow and their R&D and testing methods are the strictest in the industry.When they come out of OTC they will for sure to be reckoned with and now is the time to get into this company before you could see $15-$20 stocks from this company easily.

Second Choice: The Canopy Growth Corporation (aka Tweed Marijuana Inc.)

This Canadian company is based in Ontario. They have changed their name in recent years and are listed on the stock exchange of Toronto as “WEED.” Canada has recently approved of recreational marijuana use nationally, and this means that Canopy Growth can expect to experience some impressive monetary growth this year.

Third Choice: Insys Therapeutics Company

This company specializes in quality-of-life enhancing pharmaceuticals and has been in business since 1990. It is based in the United States and is located in Arizona. It is listed on NASDAQ.

Recreational Marijuana Will Soon Be Legalized Around The World

One very important point for investors to remember is that recreational marijuana is quickly being legalized worldwide. In addition to Canada, Germany and Britain are legalizing recreational use. The United States can’t be far behind, but there are some obstacles.

While the Obama administration removed many concerns blocking legal recreational marijuana use, the Trump administration has vowed to throw those stumbling blocks back on the path to legalization. Trump says that he is alright with medical marijuana but not with the federal approval of the possession, sale, and transport of legalized recreational marijuana.

This is bad news for recreational marijuana sales, use and investment in the US, but hopeful investors can take heart that there are still plenty of places to invest outside the US. Canada and Germany currently offer some of the best investment opportunities, and more opportunities should be opening up throughout Europe shortly.

Currently, the Canadian recreational marijuana market reaps about $80M a year; however, that is expected to increase to as much as $5B annually when the market reaches maximum force.

Three Important Things To Keep In Mind When Investing In Penny Marijuana Stocks

1. Ups and Downs

You can expect these penny stocks to provide a bit of a roller-coaster ride, but follow the example of experienced investors and ride it out. Weigh the risks against the potential returns and decide whether or not this investment is right for you. Keep in mind that the greatest investment risks often result in the greatest returns.

2. Understand and Recognize False Highs

Because this is penny stock, it will tend to be quite volatile. It is very possible for investors to buy large numbers of shares. When these large purchases are publicized, it can result in the appearance that the stock is on the rise. This prompts others to invest causing the per share price to increase. If the initial investor then decides to sell, it can have the effect of causing the stock prices to plummet.

3. Expect The Good With The Bad

Before choosing to invest in a company, study their reports. You should see a balance of good news and bad news. If the company reports are nothing but exciting, positive information, proceed with caution or simply pass that company by. One-hundred percent positive reports are simply too good to be true.

Of Course, It’s A Risk!

Any time you invest in a new market, it’s a gamble. The marijuana market is a brand-new growth market. Penny stocks can be cheaply had because they are more of a risk than blue-chip stocks. There are four basic reasons for this:

1. There isn’t much information available on the stocks listed.

2. Listing standards are minimal.

3. Companies listing penny stocks are often very new.

4. Low liquidity can make selling difficult.

Even so, with penny stocks, you have an opportunity to invest a little and a possibility of gaining a lot. With recreational marijuana penny stocks, It’s early-days, and the market is volatile. That can be a bit scary, but it can also be a superb opportunity for solid investment.

Comments are closed.