Risk is something that is quite common in the cannabis industry. Whether investing in the short or the long term, cannabis stock investors usually encounter risk on a daily basis. Because of this, it can be a great tool to develop a strategy to stick with no matter what happens in the industry. Currently, marijuana stocks are taking a huge hit from the coronavirus. This pandemic has taken its toll on the whole stock market and not just pot stocks. But, with so many companies in the cannabis industry, there are definitely some to choose that may be the right choice for the more risk-averse investors.
Some have stated that the cannabis industry as a whole could see as much as $70 billion in sales within the next ten years. While much of this growth is going to hit the top of the industry, there’s no doubt that it will be spread out across the market. Some of the less risky pot stocks to watch include ancillary companies and those with a smaller role in the market. These companies often have less volatility simply due to the amount of exposure they have to the cannabis market as a whole. This is not to say that there are pot stocks with no volatility, because that would be false. Rather, there are some key cannabis stocks out there that might just have smaller fluctuations than most.
Marijuana Stock To Watch #1
Alimentation Couché-Tard (ANCUF Stock Report) may come as a surprise on this list as it is not a traditional pot stock in any sense of the word. Despite this, the company has been working to make its foray into the cannabis market. For those who don’t know, Alimentation Couche-Tard is the owner of the Circle K branded convenience stores. Late last year, the company purchased a 10% stake in the cannabis retailer, Fire and Flower.
With this, it has stated that it will use its expertise in the retail market, to help the latter grow substantially. The company as a whole has profits totaling more than $1 billion which is more than any cannabis stock can say. In addition to this, it has almost $1 billion in free cash, which should help it if it sees any volatility from the coronavirus. But, as a major company outside the cannabis market, the company looks like an obvious choice for a pot stock to watch for the aforementioned reasons.
Marijuana Stock To Watch #2 A More Obvious Choice
GW Pharmaceuticals (GWPH Stock Report) is tossed around a lot when considering a pot stock with less volatility than others. The company does not touch the draw cannabis plant, but rather it is a producer of various pharmaceutical drugs using cannabis compounds. A few years ago, it received FDA approval for its drug known as Epidiolex. The drug, which treats rare epilepsy disorders, has seen the mass appeal for its ability to work when other drugs don’t. Although it does have some exposure to the cannabis market, as a pharmaceutical company primarily, that exposure is very limited.
Because of this, it seems like GW Pharmaceuticals could be a safer choice when looking for a pot stock to watch. In addition to this, the company has managed to grow its sales tremendously. The company went from $15 million in sales in 2018 to over $300 million for the 2019 year. This type of growth is unparalleled and has yet to be reflected in the company’s stock price. With all of this in mind, the company continues to bee a strong contender for any cannabis stock list.