Millennial Investors and Marijuana Stocks
The growing legal marijuana industry seems to be trending among millennial investors these days.
Recently on “Robinhood,” a trading app that’s popular among young people, three of the four most-added stocks were marijuana producers. These were Aphria Inc (NYSE:APHA), Aurora Cannabis Inc (NYSE:ACB), and Cronos Group Inc (NASDAQ:CRON). (Source: “Millennials keep pouring money into marijuana stocks (ACB, TLRY, CRON, CGC, MJ),” Markets Insider, February 7, 2019.)
While I like ACB stock and CRON stock, I suggest that millennials read more Profit Confidential articles to understand why APHA stock may not be so hot going forward. Nevertheless, the fact that young investors like pot stocks is great news for all the other marijuana bulls out there.
What this speaks to is that the next generation of traders is very much in on the marijuana sector, and will likely help propel the nascent industry from its developmental stages into adulthood as the years progress.
ACB stock, for instance, recently eclipsed all other stocks on Robinhood, knocking out giants like Apple Inc. (NASDAQ:AAPL).
All three cannabis stocks on the aforementioned list have had great runs in 2019.
Chart courtesy of StockCharts.com
As you can see in the above chart, all three stocks recently saw gains of more than 50% in a period of 30 days, with CRON stock leading the pack with a whopping 71% gain.
The burst in pot stock activity from young traders coincides with the Canadian marijuana legalization in October 2018 and the increasing acceptance of the drug as a legitimate product in markets around the world.
Marijuana exchange-traded funds (ETFs) have also been gaining popularity among millennial traders (a smart move, if I do say so myself).
The takeaway here is that, while older investors and institutional investors may try to steer clear of marijuana stocks (for now), millennials share no such apprehension.
What’s even better is that, as millennials age and begin to take over the workforce, expect marijuana to grow in terms of societal acceptance and, therefore, its acceptability among institutional investors.
After all, if the bank investment managers of tomorrow are investing in marijuana stocks today—and likely making a killing—it stands to reason that they will be more than willing to put their institutions’ weight behind an industry that has proven to be lucrative for them.
While it may not have much bearing on the near future, the fact that millennial investors are flocking to marijuana stocks speaks to a generational shift that will welcome a new era for the legal cannabis industry.
That means more social acceptance, more capital, and—ultimately—more financial growth for years to come. For investors who are going long on marijuana, this is very good news.