I have only owned two “cannabis related” stocks. For a few years now I have been a happy shareholder of Scotts Miracle Gro-SMG, and Innovative Industrial Properties-IIPR. Both listed on NYSE.
Of the two, IIPR has been the better performer. It pays a very nice dividend, $6 per share.
SMG is well off of it’s highs, but I think it will run back up. SMG pays $2.64.
My cost basis on both is well below 100.
I am very risk averse these days, and I have not yet seen any pure cannabis play that I’ve liked enough to jump into.
ETFs - Exchange Traded Funds- are a more conservative way to enjoy the run up in cannabis stocks and cannabis related stocks.
ETFs trade like individual stocks, but are similar to the Mutual Funds of old.
Instead of owning an individual company, you own part of a portfolio of related companies.
They track an index, sector or asset and help provide diversification.
Of the two you mentioned, MSOS is far larger. 1.1 billion vs. 88 million.
MSOS appears to be very conservative, because half of the assets are currently in a US Treasury fund.
ETFs are, IMO, the best way for new investors to acquire a position in the (hopefully) future booming cannabis industies.
I have stock in 17 diff canna related companies and 5 in shroom related companies
I figure drugs have been making people wealthy for a long time lol
Also I bought at the absolute low when COVID first hit and things were way undervalued then sold when they corrected and rebought at the next dip.
My favorite breakfast is a tasty dip
Schwab has changed policy on penny stocks on the 15th of December. Now they charge $6 in/out for pink sheet penny stocks. I never thought of cannabis as a money making proposition for a few reasons. It’s a niche market product anybody can grow in their yard, roof, closet etc. It’s against federal law making it mostly an all cash business. But the main reason, states, counties snd towns see cannabis as their private golden goose and they squeeze as much gold from it as possible through taxes, license fees, area charges for stores and land creating disparities between farmers and retailers. With all the government burdens the retailer needs to buy cheep as possible and the flood of new farmers has dropped the price of a pound from a high of around $4,000 to between $500 and $900.
When legalization for medidal first came on the scene, many farmers who had bought their rural acreage in the late 60’s and eary 70’ or maybe $5 - 10K began selling their farms for $4,000,000. Now farmers are selling their farms for $700,000 more or less because they only get one crop a year. Today rthe only way to make money is in super automated greenhouses that cost hundreds of thousands - if you can find someone to take the risk of financing.
My sweetie bought a bunch of canna stocks when they first came out around an average price of $4 - $6 now worth .06 - .24. She’s holding hoping the government will legalize and her stocks will rise to profitability. I highly doubt it for reasons mentioned.
That is precisely why I have only invested in ancillary cannabis stocks thus far.
Picks and shovels baby!
Scotts Miracle Gro and Innovative Industrial Properties are the only cannabis related companies that I feel comfortable with owning. I am, however, looking to diversify when prudent.
Penny stocks are way too risky for my current taste and risk tolerance.
Another thought: If the government ever legalizes pot (strong doubt for the near future) the big industry cigarettes and maybe a few pharmaceuticals “MIGHT” move in, buy up the best company’s stocks. If that becomes a profitable move, there could be a food fight for the best ones and a short panic boost. A lot of “if’s.” The pick and shovel buy is probably the smartest in that field. I’m doing the high yield dividends mainly REITs and BDC’s. So far so good.
A REIT stands for Real East Investment Trust. It’s category of stocks the SEC (Security Exchange Commission which make the rules for the stock market) allows big tax breaks if they put out so much in dividends to stock holders. I like dividends. BDC stands for Business DevelopmentCorporation. It’s another category of companies that lend money to other businesses and get the big tax break for giving out dividends. I don’t know of any REIT’s or BDC’s in the cannabis business, likely because it’s illegal nationally. But they may be out there.
@EpiKatz what about companies that would service the cannabis industry but don’t ever touch the plant or its derivatives? Do you suppose such a company would qualify?
