The focus for marijuana stocks has mostly been with the top three largest cannabis cultivators by production capacity. But, after massive volatility struck in the latter half of 2019, many investors decided that they wanted a safer alternative. Now, it’s worth noting that no investment will ever be 100% safe. But, some offer lower rates of volatility and more stability than others. When we think of investing in marijuana stocks, oftentimes safety is not the first thing that comes to mind. The majority of investors in the industry are looking for highly volatile, swing trade pot stocks. This strategy can be very solid, but other investors may be looking for a more stable place to put their money.
This means that alternative ‘non-pot stocks’ may just be the right choice. Moving further into 2020, it looks as though the volatility in the industry won’t slow down any time soon. But, there are some very interesting pot stocks that should be gaining more attention than they have. The two listed below are in no way pure-play pot stocks, but that might just be the reason for their rise to the top. As the cannabis industry continues to face challenges throughout this next year, these two pot stocks are definitely worth considering.
A Pot Stock With Minimal Involvement in the Industry
Constellation Brands (STZ Stock Report) is not what is considered to a true pot stock. But, after investing several billion dollars into Canopy Growth (NYSE:CGC), it gained a 38% stake in the largest cannabis company in the cannabis industry. Because of this, it can be considered to be a part of the cannabis market. So what is it that separates Constellation Brands from the rampant market swings? Well, its primary business is in the production of alcoholic beverages.
The company is a behemoth in the beverage market, capturing 35% of the total industry during the last trading in 2018. Since that time, Constellation Brands has decided that cannabis-infused beverages could just be the future. The company has since been able to push out consistent gains with solid earnings in the majority of its reports. In addition to this, the company pays out very sizable dividends to its investors which come in at just under 2%. For now, we are still waiting on Canopy Growth to begin production of these new cannabis-infused beverages, but in the meantime Constellation Brands still remains an interesting stock with strong ties to the cannabis market.
A Leading Ancillary Pot Stock
Scotts Miracle-Gro (SMG Stock Report) is another company with large ties to the cannabis market. You might be thinking, Scotts Miracle-Gro, the same company that produces gardening supplies? And you would be correct. But, the company has secretly been working to dive deep into the cannabis market with its subsidiary, Hawthorne Gardening. Hawthorne Gardening was created to help those who wish to grow cannabis and other plants utilizing hydroponic growth methods. Because of its minimal involvement in the actual cannabis market, the company has not fallen victim to most of the high levels of volatility that we have seen.
Since the beginning of March, Scotts Miracle-Gro has shot up in value by almost 20%. This has gained the company quite a bit of attention and for good reason. Year to date, the company is also up by around 50% which is quite substantial for any company, and especially substantial given its ties to the cannabis market. Because of this, Scotts Miracle-Gro has earned its place on the list of pot stocks to watch, despite not being a pot stock for the most part.
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