With Canada and the U.S. dominating the cannabis industry, investors who are involved with marijuana stocks are waiting for another potential green rush. Right now the industries focus is on the U.S. and Canada. These are the two areas of the world with broad legislation and booming industries for pot stocks. Given that the cannabis market is still young, many are still confused about the process when looking for marijuana stocks to buy. Although many areas of investing in pot stocks are similar to traditional investing, there are some important differences to take note of.
Investing in marijuana stocks takes a lot of hard work and dedication to research. This is not to say that buying pot stocks is difficult, but there are some important aspects that investors should address. This includes everything from which area of the market is of interest, all the way to the best strategies to utilize for investing. When dealing with pot stocks, there are many options when it comes to finding the right marijuana stock to watch. This guide should help to answer some frequently asked questions about investing in two distinct areas of the market.
What Marijuana Stock Sub Sectors Should I Look At?
When looking at pot stocks, there are several sub-sectors to consider. Two of the most well-known subsectors include pure-play pot stocks and biotech cannabis stocks. All of these distinct niches have big-name pot stocks within the sector. So when making your choice on where to invest some of the factors include one’s volatility threshold and what one wants their portfolio to look like. Below are some examples of the more popular pure-play pot stocks.
Canopy Growth Corp. (CGC Stock Report)
Tilray (TLRY Stock Report)
Aphria (APHA Stock Report)
The pure-play pot stocks are the most obvious choice when it comes time to make a decision. These companies are the most well-known pot stocks and usually have been around for the longest. But, as the top dogs in the cannabis industry, they are often subject to the frontline of market fluctuations.
This means that pure-play pot stocks are often extremely volatile when compared to other sub-sectors of the cannabis industry. In addition, these companies are broken down into the markets that they serve. In the U.S., we have both the medicinal and recreational markets to contend with. For this reason, it is worth finding as much information on pure-play pot stock to figure out which one is right for you.
These Pot Stocks Are Focusing On The Biotech Sector
Biotech pot stocks offer a different opportunity for investors. The majority of these companies only develop cannabis-based medicines as a part of their business. This means that often times, they are less subject to the high price swings that we have seen throughout the market. One thing to note is that performance is greatly based on policy and new legislation.
Right now in the U.S., it is difficult to deduce what the future will look like for marijuana-based pharmaceuticals. The FDA has been quite kind to these companies, offering fast-tracking of approvals, but who knows how long this can last. With groundbreaking drugs entering the market, pharmaceutical pot stocks do present an interesting and new opportunity for investors to take a closer look at. Below is a list of marijuana stocks focused on biotech applications
GW Pharmaceuticals (GWPH Stock Report)
Cara Therapeutics (CARA Stock Report)
Zynerba Pharmaceuticals (ZYNE Stock Report)
When it comes to finding the right pot stock to buy, these two areas of interest could be a great place to start. With most pot stocks gearing up for the future, it’s worth researching to find the right one for you.