Blog : Marijuana Penny Stocks go to Pot
by Peter Leeds on April 23rd, 2014
To clarify, I don't think any of these marijuana stocks represent great value right now, and if anything they are greatly over-priced. Buying what everyone else is buying is NOT a way to make money on your investments, especially if you are coming too late to the game.
Investors may think because the topic of marijuana is on the news, that it makes the related penny stocks a good investment. If making money from stocks were that easy, we'd all be rich. The way to build a handsome profit is to buy shares in well-run, well-funded penny stocks. None of the marijuana-related companies we reviewed appear to be even close to well funded. In fact, the majority should already have gone broke, and indeed they may soon enough.
Many wrongly believe that my stance against these companies with poor fundamentals means that I am also against legalized marijuana, but that is actually not true. The rampant drops in crime rates in the first two months of legalized pot sales (compared to the same time period in the previous year), combined with the increased tax revenues, makes legalizing marijuana a matter of time for the majority of States.
These States have been watching Colorado's "experiment" closely, and are quickly learning that the benefits outweigh the risks quite significantly.
As a medical marijuana candidate, it also makes sense to me. As a potentially beneficial aspect of my treatment protocol (I have MS), there is very little reason why I shouldn't use it. It's also much less expensive than many of the other drugs and procedures I'm involved with (some conventional, some unconventional).
In fact, tecfidera alone is running me about $20,000 per year, while every time I go to Albany for a CCSVI procedure, the bill is near $10,000. Moral of the story - I really should get a health plan!!
In the mean time, do not fall into the trap of joining the crowd of investors who are piled into marijuana penny stocks. This is especially true for anyone who has not invested yet but is thinking about it. Investors in these stocks will lose.
For those interested in getting involved with winning stocks for a change, drop by our newsletter and take a free trial. You'll get to see all our hot penny stock picks, along with buy and sell price opinions and daily updates.