Marijuana Stocks for U.S. Investors
The marijuana game heavily favors Canada at the moment. With a weed-friendly government pushing through legislation to legalize recreational use, there is simply no other developed nation on earth that is taking such a positive stance on marijuana right now.
That’s why Canadian marijuana stocks are valued as high as they are. But just because these companies are based in the Great White North doesn’t mean they can’t be solid marijuana stocks for U.S. investors.
While there are some solid U.S.-based medical marijuana stocks, Canada currently has the monopoly on recreational marijuana stocks, due to the country’s move toward marijuana legalization. This has fueled strong growth among Canadian weed companies, with many of them recently jumping by triple digits.
It only makes sense, then, that U.S. investors would want to get in on the massive growth that the industry is experiencing.
With that in mind, I’ve compiled a list of three Canadian marijuana companies that could be solid marijuana stocks for U.S. investors.
But before we get to those, let’s cover some key factors that will influence what makes certain marijuana stocks for U.S. investors superior to others.
Canadian Marijuana Stocks
There are a great many strong Canadian marijuana stocks out there, and that can make choosing the right one a daunting task (after all, if it were easy, I wouldn’t have a job).
It’s important to weigh your options before jumping into the market.
As far as marijuana stocks for U.S. investors go, there are two key principles that should be adopted.
First: Canadian marijuana stocks are, by and large, safe for U.S. investors.
By safe, I don’t mean guaranteed returns. Instead, I’m saying that Canadian stock exchanges, especially the Toronto Stock Exchange (TSE), are reputable and are not fly-by-night operations. Should you choose to invest in these stocks, you can rest assured that your money isn’t lining a scammer’s bank account.
Some investors are reluctant to buy stocks on foreign exchanges, and that’s their prerogative. But companies with large market caps, strong industry presence, and listings on Canadian exchanges like the TSE are almost certainly going to be legitimate, meaning that buying shares on the exchange or over the counter (OTC) are both going to be secure ways to enter the marijuana stock market.
Now for the second principle: beware companies that aren’t listed on trusted exchanges.
As with any boom time in an emerging industry, less-than-savory characters are drawn to the money-making and seek to take advantage of goodwill and hype.
This is a common practice and one that we naturally want to avoid.
We’ve seen the exact same thing happen in the cryptocurrency market with a number of small-cap operations popping up seemingly overnight, hoping to attract investment dollars, only to prove to be weak or virtually empty companies.
The marijuana industry is not immune from these characters. As such, when looking into marijuana stocks for U.S. investors, avoid small-cap pot companies that aren’t listed on a foreign exchange.
You don’t have to look far to find examples of companies that are not the ones you’d like to be funneling money into.
It’s important to note that those types of companies are the exception rather than the rule, but it still pays to be safe.
With all that out of the way, let’s get to the best marijuana stocks for 2018 for U.S. investors.
Marijuana Stocks List
1. Cronos Group Stock
Of the three marijuana stocks for U.S. investors that I’m going to discuss, only one has a Nasdaq listing, and that’s Cronos Group Inc. (NASDAQ:CRON).
The company shot up in relevance when it announced that it was listing on the Nasdaq in late February.
CRON stock jumped by 30% in the immediate aftermath of the move. It gave some of those gains back, but the stock is still up over 10% in March.
Chart courtesy of StockCharts.com
While 10% may not be the type of massive gains that the marijuana industry has been known to provide, an important caveat here is that the sector is currently in the midst of a downturn.
Following the bullish surge that we witnessed at the end of 2017, where companies grew by hundreds of percentage points, the market corrected itself and brought most marijuana stocks back down to earth.
Cronos stock’s impressive performance, then, is notable for having bucked the trend.
And of course, being on the Nasdaq lends this company an air of legitimacy and prominence among other marijuana stocks. It stands out among Canadian marijuana stocks as one of the stronger ones in 2018, for good reason.
So long as it maintains a monopoly on the Nasdaq listing for pot companies, that makes it a very enticing target. As far as marijuana stocks for U.S. investors go, CRON stock offers security and legitimacy, alongside the other strengths of the marijuana market.
2. Canopy Growth Stock
But our next pick isn’t going to sit on its laurels and let Cronos stock reap all the rewards of a Nasdaq listing. Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED) went on record in late 2017, stating that it was looking into being listed on the Nasdaq.
Chart courtesy of StockCharts.com
“When Constellation put money into our business, the number of U.S. institutional investors interested in us went way up,” said Canopy Growth CEO Bruce Linton, referring to the deal with liquor producer Constellation Brands, Inc. (NYSE:STZ). (Source: “Canadian weed producer Canopy should list on Nasdaq ‘in due course’: CEO,” Reuters, March 1, 2018.)
“The Nasdaq is doing a great job not allowing people to list who break federal laws and that’s a place where we should list in due course.”
Linton added, “We prepared to list in October and we pulled it back, because trying to do the deal with Constellation was already 11 months of complexity.” (Source: “Canopy Growth eyes potential Nasdaq listing,” Financial Post, March 1, 2018.)
Canopy Growth is, of course, the largest in the marijuana industry by market cap and is one of the stronger companies overall.
It, too, saw a boost in its value when it mentioned its interest in the Nasdaq.
I also prefer the Canopy Growth stock forecast to the Cronos stock forecast, with the long run favoring WEED stock. Both are still solid options and, for those looking for Canadian marijuana stocks already on the Nasdaq, CRON stock is the only choice.
But if you don’t mind investing in OTC shares or on Canadian exchanges, I believe that ultimately, Canopy will have the better future.
3. Aurora Cannabis Stock
My final pick is another marijuana company I’ve been bullish on in the past, and one that has similarly signaled its intention to get on a U.S. exchange: Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).
Aurora has long been one of my favorite Canadian marijuana stocks. I believe that the outlook is strong for Aurora in the long run, even if the short term may be a bit hairy.
Chart courtesy of StockCharts.com
The company has suffered more than most in the recent correction and, even though it also announced that it was looking toward a Nasdaq listing, the news did little to rescue ACBFF stock.
But I still am a strong believer in the potential of ACBFF stock and believe that, if you ride out this current downturn brought on by the correction, the company will be able to bounce back as we near the summer and marijuana legalization in Canada.
For me, it still remains one of the best marijuana stocks for 2018, even if the beginning of the year hasn’t been kind to the company.
It’s not hard to see the gulf between Canadian marijuana stocks and the rest of the industry.
Just look at the North American marijuana index versus the Canadian marijuana index. They, at times, enjoy an inverse relation, showing investors jumping ship from one set of stocks to the other, depending on which way the wind is blowing.
But the Canadian market is still king. As far as marijuana stocks for U.S. investors go, if they want to see the biggest rewards, they’ll have to put their money north of the border for now.