How To Get Invested in Cannabis? Here Are Top Marijuana Stocks To Invest in 2023!
Cannabis is permitted for medical purposes in 37 states and for recreational use in 21 states. There are numerous ways to invest in cannabis equities, ranging from farmers to REITs to software firms. Despite the fact that cannabis is legal in many states, it is still prohibited at the federal level, so investors need to be aware of this risk.
There are more marijuana businesses as more states allow it for recreational use. There is money to be made with a market worth an estimated $16.7 billion and a projected 25% yearly growth until 2030. Here are the top cannabis stocks to research, along with a significant danger that investors need to be aware of, and information on how to invest in cannabis using Q.ai.
The Allure of Cannabis
Through mind-altering activities like smoking cigarettes and drinking alcohol, people try to cope with the daily stressors of life. Even though these two substances are lawful, they have negative health impacts when used repeatedly. Cannabis, which may be used in a variety of ways, is thought to be less dangerous than alcohol and cigarettes while still producing a consistent and manageable high.
Many cannabis users wish to keep their general health while yet being able to unwind for a time. Compared to smoking and drinking, consuming cannabis is linked to a lower risk of cancer, liver, and kidney damage.
Tetrahydrocannabinol (THC), the primary psychoactive component of cannabis, has been shown to have a number of beneficial effects, including the reduction of drug side effects, relief from chemotherapy-related nausea in cancer patients, and an increase in food intake in HIV patients.
States Legalizing Marijuana and The Impact
In 1996, California became the first state to approve the use of marijuana for medicinal purposes. Colorado and Washington both legalized marijuana for recreational use in 2012. 37 states have authorized medicinal usage as of 2023, while 21 states had decriminalized recreational use, together with Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and Washington, D.C.
Numerous states where marijuana is still illegal have scaled back their enforcement efforts and criminal penalties for small-scale marijuana possession. The selling of legal marijuana through dispensaries has resulted in a revenue windfall for states that have legalized both medicinal and recreational marijuana.
Instead of spending money on arrests, court appearances, and enforcement actions, many states now profit from the marijuana industry. The taxes derived from the sales of recreational marijuana have helped fund many social programs offered by these states.
For instance, Colorado received $2.3 billion in tax revenue from marijuana between 2014 and 2022. Last but not least, marijuana tourism contributes to state revenue because residents of states where marijuana is outlawed will travel to states where it is legal to consume cannabis without fear.
Investing in Marijuana Stocks
Here are a few to take into account for investors intending to start a position in cannabis companies.
Curaleaf Holdings Inc. (OTCMKTS: CURLF)
With 147 dispensaries and 29 cultivation locations, Curaleaf runs operations in 21 states. It provides strains and exclusive products with different THC concentrations and ingestion methods. With more than 6,000 employees, it is a significant employer in the legal and medical marijuana sectors. The business is growing and seeks out opportunities to broaden its reach whenever they present itself.
Long stretches of highs and lows characterize its stock price, which is frequently erratic. In February 2022, the stock price rose as high as $8.90 before falling to under $4 in January 2023. Curaleaf will be in a strong position to deliver its product to the retail sector and develop into a reliable performer once the legal marijuana market stabilizes.
Green Thumb Industries Inc. (OTCMKTS: GTBIF)
Cannabis merchants across the country can purchase packaged-for-customer products from Green Thumb Industries. Through the usage of cannabis, it attempts to enhance users’ well-being while also giving back to the local communities it serves. Additionally, the business runs RISE retail locations all throughout the nation.
It operates in 15 U.S. areas, has 77 retail locations, and has 18 manufacturing sites. Green Thumb reported a 3% increase in sales growth over the prior quarter and a 12% increase year over year to $261 million in the third quarter of 2022. Although its stock has been volatile, it might be worthwhile to acquire and keep following a decline.
Green Thumb Industries Inc. (OTCMKTS: GTBIF)
Cresco Labs cultivates, produces, and distributes its goods via its dispensaries and wholesale distribution networks. The business has 56 retail licenses, 56 dispensaries, and 21 grow facilities across its 10 operating states. Its retail storefronts in Sunnyside sell cannabis products alongside other organic, non-cannabis health and wellness items, and its dispensaries work to educate customers about their goods.
Cresco’s stock has been steadily declining during 2022 despite not being as volatile, falling from $6.75 in January 2022 to about $2 since the start of 2023. Whether Cresco Labs can outbid more established businesses like Curaleaf and Green Thumb will determine how the stock performs. With the support of its Sunnyside outlets, it might be able to sell more of its goods and increase its profitability.
Innovative Industrial Properties (NYSE: IIP)
A managed real estate investment trust (REIT) called Innovative Industrial Properties specializes in purchasing, owning, and managing real estate that is rented to state-licensed marijuana businesses. The company owns 111 buildings totaling 8.7 million square feet of rentable space as of September 30, 2022. Additionally, it owns 2 million square feet in 19 states that are either being developed or renovated.
The fundamental goal of the business has a proven track record of success. The marijuana sector is still in its infancy and open to the market and legal challenges. Three of its tenants are currently in default on their loan payments, lowering its overall rent collection to 92%.
Finding a substitute tenant is harder due to the REIT’s specialized expertise. When Innovative issued a warning regarding delinquent tenants, the value of its stock decreased. In the foreseeable future, the corporation will lose more of its stock value if more tenants fail.
Scotts Miracle-Gro (NYSE: SMG)
Jim Hagedorn, the CEO of Scotts, has long believed that marijuana will eventually become legal on a federal level. Despite the fact that marijuana producers have long known that Miracle-Gro creates high-quality plants, the corporation was not allowed to promote them. By acquiring businesses that make goods for the hydroponics market, Scotts got over this ban.
The future is bright for Scotts Miracle-Gro as additional obstacles to marijuana growth are being removed. There will always be a market for the supplies required to produce the plant as long as people want to grow their own supply for either personal use or sale.
Selling hydroponic equipment has the additional benefit of giving the business a wider market for its goods because it can be used for different types of agriculture. Following a decline in 2022, Scotts’ stock price has been progressively rising, and it is currently well-positioned for future expansion.
Akerna (NASDAQ: KERN)
Akerna does not engage in the production or distribution of marijuana. As an alternative, it offers cannabis businesses software tools for inventory control and legal compliance. The third quarter of 2022 saw a 5% increase in overall sales and a 17% increase in software revenue year over year. In the third quarter, software bookings amounted to almost $440,000, while transaction volume climbed by 10%.
After reaching a high of $30.40 in February 2022, the price has since fallen. A sluggish stock market and dwindling expectations that the Biden administration would legalize marijuana on a federal level are the main causes of this fall. When this did not occur, the stock started to drift downward.
The Risk of Investing in Cannabis Stocks
Despite the fact that a few states have legalized marijuana, it is still illegal on the federal level, thus this must be kept in mind. This indicates that businesses in the cannabis industry face obstacles. For instance, there are stringent banking laws around illegal narcotics. A credit union or state-chartered bank is also an acceptable alternative for any marijuana-related business instead of a major bank.
As a result, compensating employees may be problematic. Additionally, a lot of credit card companies won’t cooperate with these businesses, thus dispensaries typically only accept cash as payment. The possibilities for cannabis companies’ future growth may be considerably impacted by this. Investors should be mindful of this danger even though these companies are now doing well.
Investors may decide to put money into an exchange-traded fund that owns a variety of businesses to spread this risk. One such item is the Q.ai Guilty Pleasures Kit. It spots market trends using the capabilities of artificial intelligence and bases its investments on those patterns. It’s vital to remember that in addition to cannabis, this package also invests in businesses that promote sexism, alcohol, gambling, and cigarettes.
The Conclusion
As additional states legalize marijuana for recreational use, the cannabis sector should continue to expand quickly. The sector will eventually need to consolidate, and small businesses will either be acquired by larger businesses or go out of business. As a result, in order to ensure that their investment dollars have the best possible chance of expanding, investors must conduct thorough research and invest in the best of the breed.
