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How to Invest in Emerging Industries Like Marijuana

Tracey Ryniec

  • (0:30) - Investing In Emerging Industries

  • (4:10) - Marijuana Stocks Taking A Hit: Is It Time To Invest?

  • (10:00) - Is Hemp and CBD the Way To Go?

  • (15:35) - What Can We Expect For The Future Of The Cannabis Industry?

  • (19:00) - Top Picks To Watch Out For

  • (26:15) - Episode Roundup: CHWY, ACB, CGC, GWPH, IIPR, MJ

  • Podcast@Zacks.com

Welcome to Episode #196 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is joined by Zacks Stock Strategist and the editor of the Marijuana Innovator newsletter, David Borun, to talk about what is going on in the marijuana industry, especially with the stocks.

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Investors are still in love with the pot stocks despite the big sell off in the shares in 2019.

Like many new industries, there have been growing pains in marijuana as small companies try and adjust to being in the spotlight as well as coping with growing their business which is moving at lightning speed.

How should investors be looking at the industry?

Individual Stocks or the ETF?

There actually is a marijuana ETF, the ETFMG Alternative Harvest MJ. It owns some of the pure play marijuana stocks along with those in similar related industries.

Year-to-date it’s down 18.8% as the marijuana stocks have gotten hit.

It’s also passively managed, which means there is no one running it who can move quickly if something doesn’t go right at one of the companies.

Many investors have been hiding out in the cannabis grower stocks like Aurora Cannabis ACB and Canopy Growth CGC.

Aurora is down 16.3% and Canopy Growth has fallen 15.4% year-to-date.

Could this be a buying opportunity in the growers?

Look Outside the Box

Instead of just focusing solely on the growers, David encourages investors to look at other parts of the industry.

1.       Innovative Industrial Properties, Inc. IIPR shares have retreated 30% in the last 3 months. This is a REIT, which leases properties to licensed medical marijuana operators in states that have legalized medical marijuana use. It pays a dividend, which is currently yielding 3.5%.

2.     GW Pharmaceuticals GWPH is the first company to have an FDA-approved drug using extracts derived from cannabis. Now that the drug has launched, earnings are expected to soar 617% next year. Yet shares are down 32% over the last 3 months.

Valuations have come down in many of the pot stocks.

Is now the time to buy?

Find out the answer to this, and more, on this week’s podcast.

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GW Pharmaceuticals PLC (GWPH) : Free Stock Analysis Report
 
Innovative Industrial Properties, Inc. (IIPR) : Free Stock Analysis Report
 
Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report
 
Canopy Growth Corporation (CGC) : Free Stock Analysis Report
 
ETFMG Alternative Harvest ETF (MJ): ETF Research Reports
 
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Zacks Investment Research