Volatility is something that is to be expected within pot stocks. One of the key factors to this is that the industry has only been around for a few years at this point. Because of its infancy, oftentimes investors are investing off of speculation rather than intrinsic or future value that a given pot stock may have. But, as we have moved into this new year, it seems as though we are witnessing a psychological shift amongst pot stock investors. This shift is noted highly in the way that pot stocks have been trading in the past month or so. During that time, we have seen gains begin to become more stabilized.
This means that we are not seeing as many massive highs and lows during intraday trading as before. With this stability comes some key factors that are pertinent to market growth. As a market stabilizes, we begin to see the companies within taken more seriously. Instead of investing off of random daily news occurrences, investors begin to do so off of belief in a company (in addition to the technicals). Because this is occurring right now, it seems as though it is one of the most interesting times for marijuana stocks that we have ever seen.
A Key Ancillary Pot Stock to Watch
GW Pharmaceuticals (GWPH Stock Report) is one of the leading ancillary pot stocks working out of the industry. The company does not consider itself to be a pot stock, but it does participate in various cannabis-led enterprises. With this, the company has over $550 million in free cash at the current point in time. With that, it should be able to continue working on the creation of new and groundbreaking pharmaceutical compounds.
Its leading drug right now, Epidiolex has been hailed as being one of the best treatments for certain rare forms of epilepsy that exists today. But, this one drug will not catapult this company into the area in which we want it to be. With a large amount of innovation in the works, the company should continue to be considered to be a pot stock to watch despite not being a complete pot stock on its own.
Another Interesting Ancillary Pot Stock to Consider
Innovative Industrial Properties (IIPR Stock Report) is more of a pot stock than GW Pharmaceuticals, but it still is an ancillary one at that. The company operates as a REIT which means that it purchases facilities and then leases them out to those who wish to grow cannabis. For this reason, the company has managed to forgo a large amount of the rampant market volatility that we have seen recently.
Additionally, the properties that it owns ensure that the company has highly consistent profitability that shows in its balance sheet. The majority of the contracts that it has with businesses are for at least 10 to 15 years. This means that we should expect to see some growth within the next few years at it continues to add clients. For this reason, many investors continue to pay attention to this key pot stock to watch.