Can These Ancillary Pot Stocks Present an Opportunity to Investors?
Ancillary and alternative marijuana stocks have for some time, presented new opportunities to investors. Although there are plenty of pot stocks to watch, alternative marijuana stocks can provide a different type of cannabis investment. These companies range from banking services to real estate and more. The obvious ancillary pot stocks usually include Scotts Miracle-Gro Inc. (SMG Stock Report), KushCo Holdings Inc. (KSHB Stock Report), and GrowGeneration Corp. (GRWG Stock Report). But, there are loads more when looking for a pot stock to watch. One of the many benefits with ancillary marijuana stocks is that they tend to be less volatile than pure-play pot stocks.
This is because they have less exposure to the ups and downs of the cannabis industry on a daily basis. Rather, they are able to reap the gains that occur when the cannabis industry grows. This is not to say that they are immune to declines, but rather they are simply less volatile than others. In addition, many of these companies are able to push higher rates of profitability because they do not have to contend with cannabis industry related issues. With all of this in mind, let’s take a look at two alternative marijuana stocks to watch.
Pot Stocks to Watch:
A Leading REIT Marijuana Stock to Watch
Innovative Industrial Properties Inc. is one of the most popular ancillary marijuana stocks to watch. There are several reasons why this is the case. For one, IIPR stock has a long history of being consistent in its profitability and business model. The company operates as a REIT which means that it purchases properties to be leased out to those who wish to grow or process cannabis. Because of how it is structured, IIPR works off of long term contracts ranging in the 10-20 year period. This means that it has the potential to continue providing returns in the long term and the short term.
In addition, because the company does not physically touch the cannabis plant, it is more immune to volatility spikes and regulatory issues than most other marijuana stocks. In addition to this, IIPR offers investors a healthy dividend that has continued to increase with time. Year to date, IIPR stock is up by around 64%. This is quite substantial and something that should not go by unnoticed. If we look at long term trends for IIPR stock, we see that shares are up by more than 85% in the past 12 months. With this performance in mind, IIPR stock remains a pot stock to watch.
Another Ancillary Marijuana Stock to Watch
Charlotte’s Web Holdings Inc. is another leading ancillary pot stock to watch. But, CWBHF stock is not fully considered to be ancillary as it does have a role in touching the hemp or cannabis plant. Given that Charlotte’s Web-only produces CBD-infused products rather than ones containing THC, it is considered to be an alternative. The company works in the health and wellness sector which has seen a large uptick in value in the past few years. Recently, CWBHF stock has been another victim of Covid.
But, this performance means that some could consider it to be a value pot stock to watch. With Covid on the rise once again, many consumers could turn to alternative products to solve everyday issues. Because Charlotte’s Web makes products that deal with common issues such as insomnia and pain relief, it has seen large critical appeal. In addition, the CBD industry on its own has been seeing substantial bullish interest in the past six months. With Charlotte’s Web’s large role in the CBD sector, the company remains a leading ancillary pot stock to watch. And, if we look at its price action, we see that CWBHF stock is up by 23% since the beginning of October. This performance is continuing to show investors that CWBHF stock may have long term potential.
Are Ancillary Marijuana Stocks the Best Option in 2020?
There are plenty of marijuana stocks out there to choose from. These companies all range in the volatility and potential that they offer investors. Individuals should first figure out their own investing strategy before committing to anyone marijuana stock to watch. Once one has done this, it’s easy to narrow down the cannabis industry by sector and risk.
These two ancillary pot stocks present new and intriguing opportunities to all types of investors. With this in mind, individuals should continue to do their own research to find out whether these pot stocks fit one’s investing style. As always, the hopes are high that we can continue to see positive sentiment throughout the future of the cannabis industry.
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