Marijuana Stocks in 2019: A Year of Transition

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January 9, 2019 12:28pm NYSE:MJ

cannabis stocks

From Tracey Ryniec : 2018 was filled with great expectations for pot stock investors. Canada was set to legalize the recreational use of marijuana on October 17.


In anticipation, the publicly traded pot stocks like Tilray (TLRY – Free Report) Aurora Cannabis and others saw big gains.

But October 17 came and went and the “hope trade” turned into the “reality trade” as now companies had to execute in an environment that was still fraught with different regulations and expectations.

The hot pot stocks also saw big declines in the market correction at the end of the year.

Is this a buying opportunity in some of the names?

2019: The Year of Reality

There seem to be more opportunities than ever before in the cannabis industry. The American Farm Bill , which was signed by President Trump into law on Dec 20, 2018, could also have a big impact on the agriculture and consumer product industries.

The bill classified hemp as an agriculture commodity and removed it from the DEA’s list of controlled substances. This will free up farmers to grow hemp, at least in the states where it is currently legal to do so, which must have less than 0.3% of THC.

Hemp can be used in a variety of ways including in clothing, can be put in food and drink, as a supplement and in make-up and beauty products.

But it’s wrong to think that companies will just jump into the hemp market. The FDA has already warned that food and drink products with CBD must get FDA approval.

In 2019, while growth opportunities are there, the stakes are getting much higher. That’s why investors might want to go with some of the established names already in the industry.

3 Stocks Already in the Cannabis Industry

1.       Constellation Brands (STZ – Free Report) was one of the first in when it took a big stake in Canada’s Canopy Growth with the purpose of making new beverages.

2.       Altria Group (MO – Free Report) , the tobacco giant, just made waves by announcing a 45% stake in Canada’s Cronos Corporation. That’s a $1.8 billion bet on the cannabis industry.

3.       GW Pharmaceuticals (GWPH – Free Report) is a British drug company that is the first to get a cannabis drug approved. It’s cannabis drug, Epidiolex, is used by epilepsy patients.

2019 should also be a big year with new companies jumping into the cannabis fray.


The ETFMG Alternative Harvest ETF (MJ) was trading at $28.45 per share on Wednesday afternoon, up $0.65 (+2.34%). Year-to-date, MJ has declined -12.53%, versus a -2.91% rise in the benchmark S&P 500 index during the same period.

MJ currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #59 of 75 ETFs in the Global Equities ETFs category.


This article is brought to you courtesy of Zacks.


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