Welcome to TheOhioOutdoors
Wanting to join the rest of our members? Login or sign up today!
Login / Join

Investing in Cannabis

jagermeister

Dignitary Member
Supporting Member
16,388
166
Ohio
Anyone here doing it? Thinking about it? Thoughts... opinions... experiences...?

I've been doing a little research and it seems like investing may be a bit early, since the federal govt (US) hasn't jumped on board the weed train yet. There are some weed-specific companies and ETF funds that our out there, but most are either Canadian or UK funds and trading isn't exactly easy. One thing I've considered is investing in an infrastructure-related company... Something publicly-traded in the US. Cree LED's for example. Most grow operations haven't yet made the switch over to LED's yet (according to my research), and CREE doesn't mention targeting this specific niche in their business model, but I gotta believe it's in their future. They'd be crazy not to. Scott's Miracle Gro is another one. They've made it apparent that they want to be a major player in the cannabis business, buying into the hydroponics game and creating their own weed-focused fertilizers and pesticides. There's another company that has my eye... Insys Therapeutics. They're a biotech company that makes some cancer treatment drugs. They had a terrible year in 2017 due to a shady CEO and legal troubles, but with new management and a new drug coming out and current value at only about $7 per share, they have a pretty big upside.

I feel like we're at a current point it time when investing into this business could yield huge gains in the coming decades. But knowing what to buy into is the challenge. I'm curious if others here have been looking and what thoughts and opinions you may have on it.
 
  • Like
Reactions: Lucky

bowhunter1023

Administrator
Staff member
44,510
226
Appalachia
I have been watching this opportunity for quite some time and do plan to invest some money later this year. Anything the Stanley brothers (see Charlotte's Web hemp) touch is worth investing in IMO. I'm waiting on the name of the company building a massive grow operation in Athens and will likely invest in them if possible and logical. Lots of opportunities in the supply chain and service industries too.

The weed economy is coming. Too much $ in it to be ignored. And now is the time to get in.
 

hickslawns

Dignitary Member
Supporting Member
35,084
191
NW Ohio
Don't know much about it. Everything I read from you makes logical sense. Scott's sounds good because they are already established and have multiple income streams. Downside would be the fact their shares will be more expensive to buy maybe? Risk would be lower. I like buying the picks and shovels idea such as the CREE buy. Maybe a multi faceted approach to diversify risk IS the best bet? 4-5 (or more) related stocks to spread out your portfolio. Take advantage of multiple ways to buy in. Reduces some risk. Doesn't put all your eggs in one or two baskets of weed companies. I'm totally guessing here, but I would think several will fail. Possibly only because they won't get the govt green light bit they'll have money wrapped up attempting to get the green light. I don't think I would personally invest in a weed growing company unless they have all the res tape covered and are getting ready to grow. You'll miss out on early gains but minimize risk a ton.

I'm no financial advisor, but I think I threw some generic common sense things to kick around in your head.
 

"J"

Bass fishing aficionado....
Supporting Member
42,208
226
Davie County, NC
Well, not exactly. At least right now it's legal in some states and has quite a bit of international traction.

Still not legal on the federal level and that’s where the uncertainty comes into the issue and people’s concern when putting money into this side of the market....
 

5Cent

Senior Member
Supporting Member
9,079
145
Huron County, OH
JB, the state of Ohio or any other has no say in what happens in the stock market. When the fed makes a move, the markets move.
 

jagermeister

Dignitary Member
Supporting Member
16,388
166
Ohio
Thanks for the insight fellas. Kind of confirmed my gut feeling to hold off for a bit. Although I may look harder at the indirect affiliates like Scotts and Cree. I think there's potential for growth in those two companies with or without the cannabis industry's help.
 

Jackalope

Dignitary Member
Staff member
33,081
201
I'm right there with you bud. I have a fantasy stock app on my phone that goes off of real market numbers and has similar fantasy fees to actual stock trade apps. I did this mostly to try my hand at short term day trading with no real risk. On 1/28 I bought 40 shares of Scotts (SMG) at $91.96 after their stock took a huge hit from 108.59 after they released their 2017 numbers on the 26th. Turns out 88.78 was bottom of the fall but its back up to 91.55. Gonna have to hold that one a little while longer. I was banking in the spring numbers boom and the ohio weed operations being named to bump their stock back up to 108+

All of that is short term trading not investment stocks that you're looking at though. I see SMG as being somewhat tapped at the 120-150 range and I don't believe they would put the weed business under the scotts name. Due to the fed issues other have mentioned I feel that if SMG was going to gamble they would do so in a manner to limit their losses. so I'm not sure how safe of a long term buy it would be. One good thing about the stock trainer app though is it helps me keep track of the companies i'm interested in with news on just those companies. Get a feel for their pulse if you will.
 

hickslawns

Dignitary Member
Supporting Member
35,084
191
NW Ohio
Just keep your emotions out of it. I've been guilty. Stock drops. You hold on because you are certain it is coming back. It never does. On the other end, I've sold some too soon because I was up and then watched them climb substantially higher. Anymore, I try to buy a company I want to own for decades. Buy it on a dip. Forget about it. Reinvest dividends. Short term trading isn't for the rent money. Best not to bet anymore than I can afford to lose.

I hate the slow and steady gains of an IRA in relatively safe categories. It is boring. Truth be told, I've done better buying real estate and watching it appreciate while a tenant pays for the house than I have on any stocks. Slow and boring, or high risk and exciting. I suck at stocks, therefore I have learned a lot of what one should NOT do. Lol
 

Jackalope

Dignitary Member
Staff member
33,081
201
Just keep your emotions out of it. I've been guilty. Stock drops. You hold on because you are certain it is coming back. It never does. On the other end, I've sold some too soon because I was up and then watched them climb substantially higher. Anymore, I try to buy a company I want to own for decades. Buy it on a dip. Forget about it. Reinvest dividends. Short term trading isn't for the rent money. Best not to bet anymore than I can afford to lose.

I hate the slow and steady gains of an IRA in relatively safe categories. It is boring. Truth be told, I've done better buying real estate and watching it appreciate while a tenant pays for the house than I have on any stocks. Slow and boring, or high risk and exciting. I suck at stocks, therefore I have learned a lot of what one should NOT do. Lol
You mean like my purhase of 50 shares of delphi at $57.65 at the end of January that now sits at $50.85. Lmao. That's a -339 hit. Last November they split their stock from $102 to a company called APTV that specializes in the electric car stuff. Delphi will maintain powertrain engineering. Even at 50.85 its still being called a strong buy same as when i bought it at 57.65 Just wish i would have bought at 50. Lol.
 

jagermeister

Dignitary Member
Supporting Member
16,388
166
Ohio
Yea, I'm truly not interested in short term trading. I'm thinking long term investing. And Joe you may be right... SMG may be close too tapping out, but then again, someone probably thought that of them 15 years ago too. Who knows. From what I've read and been told by advisors, short term trading will always get beat by long term investing. You'll almost never buy at the lowest point or sell at the highest point. Add in trading fees... It's an uphill fight. It's not about timing the market, it's about TIME IN the market. It sure would be nice to own a crystal ball. Joe, what's the name of that app? That really would be slick for at least keeping tabs on certain stocks.
 

hickslawns

Dignitary Member
Supporting Member
35,084
191
NW Ohio
Yea, I'm truly not interested in short term trading. I'm thinking long term investing. And Joe you may be right... SMG may be close too tapping out, but then again, someone probably thought that of them 15 years ago too. Who knows. From what I've read and been told by advisors, short term trading will always get beat by long term investing. You'll almost never buy at the lowest point or sell at the highest point. Add in trading fees... It's an uphill fight. It's not about timing the market, it's about TIME IN the market. It sure would be nice to own a crystal ball. Joe, what's the name of that app? That really would be slick for at least keeping tabs on certain stocks.
One investment newsletter I subscribe to has really taught me a ton. Not sure any recommendations I've taken from them have been home runs. BUT, I've learned a ton.

I'm with you Jim. Short term stuff is almost never going to win in the long run. It's those very limited number of success stories we hear about that attract us to it. We never hear about the average Joe guy who steadily invested in safe stocks for years, yet ended up a multi millionaire.
 

motorbreaker

*Supporting Member I*
1,545
63
North of Toledo
I dont know much about stocks. But I don't think id invest in LED lights because of Marijuana. There is a ton of LED companies out there. And most large growers don't use them.
If I were going to invest id look towards the medical companies looking to make medicine out of the plant. There are a lot of small companies doing research of marijuana and most are penny stocks.
Some day the government will reschedule Marijuana and I think these companies will blow up. Money is the only reason the government hasn't rescheduled it yet.
We also need the hemp industry back but it cant happen until it gets rescheduled. Do you know that an acre of hemp can produce as much pulp as 5 acres of mature pine trees. And hemp only takes a year to grow.
 

Jackalope

Dignitary Member
Staff member
33,081
201
Yea, I'm truly not interested in short term trading. I'm thinking long term investing. And Joe you may be right... SMG may be close too tapping out, but then again, someone probably thought that of them 15 years ago too. Who knows. From what I've read and been told by advisors, short term trading will always get beat by long term investing. You'll almost never buy at the lowest point or sell at the highest point. Add in trading fees... It's an uphill fight. It's not about timing the market, it's about TIME IN the market. It sure would be nice to own a crystal ball. Joe, what's the name of that app? That really would be slick for at least keeping tabs on certain stocks.

If long term investing is your goal then I would stick with mutual stock funds dependent on your risk appetite and goals. Long term investing in single stock or even trying to manage a diversification of individual stocks yourself is a very risky business. Basically your portfolio would be a self created mutual fund of individual stocks. You would have to keep your finger on the pulse of every one of those companies every day and decide to buy, hold, or sell. Very rarely is it a good idea to buy a single stock with the intent of it being a long term investment. There's a reason successful fund managers make hundreds of thousands of dollars a year. For example, if you bought in to a fund that contained stocks of Lehman brothers before Lehman collapsed, the fund would have taken a hit but it would have been absorbed through fund diversification and across a range of investors. But if you only owned Lehman stock outright and Lehman collapsed then you lost all of it.

Investment in a single stock is something where you plan for it to be a short term investment but through it's consistent performance turns out to be a long term hold. You never know day to day what's going to happen. short term vs long term is a relative term. short term could be a day or 5 years or 10, in the world of high volume trading short term could be micro seconds. Long term could be 5 years or 20. It all depends on what your definition is. For example in August of last year Hailiang Education Group Inc (Private K-12 education HQ in China) was $9 and has exploded to above $50 in 6 months. A "short term" investor would likely sell and take the $40 and run. On the other side of the coin they could do like Amazon. In 1998 Amazon (AMZ) was a $5 stock, here 10 years later it's a $1,4445 stock. Obviously you would have held that stock as their performance has been a steady increase. They trick would be to recognize that in 1998 and hindsight is always golden. Jet Blue in 2003 was going to revolutionize the Airline industry and was all the craze with travelers. Their stock was $17 in 03 and today sits at $20 after about 10 years sitting around 4-8 bucks. That would be a 15 year hold on a stock that performed a measly 3 dollars per share today. Adjusting for inflation you lose. Now for the risk. Lehman was a 20 dollar stock in 1998 and showed consistent performance and a steady incline to around $100 in 2007, to me and everyone else that screamed hold or even a weak buy in 07, then came 2008 and everything was lost overnight. AIG was caught up in that mess also, in 1995 AIG was a $250 stock and was almost 1,300 in late 2007. AIG didn't tank but their stock price hit $5 in 2008 and today 10 years later still only sits at the $50 mark. For long term investing a fund fee is a small price to pay to have a professional diversify a portfolio who does this stuff every waking minute of their life. I mean Just my two cents but every individual stock purchase of a single company should always be viewed as a short term investment that through luck turns in to a long term hold, But even that comes with a large risk.
 

Jamie

Senior Member
3,493
110
Licking Co.
I agree, Joe. I bought as much BP stock as I could afford after the big oil spill, operating under the assumption that I would double my money in 5 years or less. well, in five years I could have sold for twice what I paid, but BP pays such a good dividend that I decide to hold. still paying a good dividend, but the value of the stock is only about 60% higher now than I bought it for, and steady. much to consider when purchasing individual stocks, and dividends is something the average investor should look at. for lower risk and more predictable returns other investment products are a better option than stocks. investing in weed is going to be a total crapshoot for anyone who is not inside the industry until the federal gov. gets out of the way.