Americann Stock: Is This Marijuana Services Company the Best Play for U.S. Investors?

americann stock forecast
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Americann Inc Stock Price

For investors seeking publicly traded companies that allow them to access the U.S. marijuana market, the options are limited. Most publicly listed companies are based out of Canada and due to rules imposed by Canadian exchanges, many have chosen to totally forgo U.S. marijuana investments or face delisting. But is a company like Americann Inc (OTCMKTS:ACAN)—one that provides exposure to the U.S. marijuana market indirectly—the answer? The Americann Inc stock price certainly suggests so, but this isn’t as cut and dry as it seems.

The Americann Inc stock price has jumped by an impressive 53% in the past month. That is a fantastic return in keeping with many other marijuana gains we’ve seen in May as the industry continues to emerge from a correction.

Year-to-date, the Americann Inc stock price is only up about 10%.

While these numbers are impressive, investors need to weigh several factors before jumping all-in on Americann.

ACAN Stock Forecast

In order to understand the ACAN stock forecast, let’s first go over what ACAN stock does.

The company develops medical cannabis cultivation facilities.

With medical marijuana legalization in the U.S. growing at a rapid pace, it makes sense that companies would develop to take advantage of the growth.

Not to mention that by being in the marijuana services industry rather than developing the drug itself, Americann is able to skirt the federal prohibition on marijuana that prevents cannabis growers in the U.S. from listing publicly.

On the face of things, the ACAN stock forecast is very positive.

Chart courtesy of StockCharts.com

On top of its massive run in May, the company is developing one of the largest legal grow operations in the U.S.

In December 2016, Americann announced that it would begin developing what was the largest marijuana growing facility in the country at the time. (Source: “Big Pot & The Race for the ‘Biggest Marijuana Grow’,” CannabisNow, April 29, 2018.)

The 1,000,000-square-foot Massachusetts Medical Cannabis Center is being constructed in Freetown, about 50 miles south of Boston.

There’s a lot to like about Americann Inc between its impressive stock growth and its eye toward expansion.

Not to mention that with the Americann Inc stock price at just under $5.00, the company is one of the hotter marijuana penny stocks on the market right now.

Investors seeking to gain exposure to the U.S. marijuana market may see the ACAN stock forecast and fall in love.

But I would caution investors from jumping in just yet.

You see, while the ACAN stock forecast does look promising, I have one major reservation about the company: It is a penny stock listed on the over-the-counter (OTC) market.

This is usually a red flag for me.

Marijuana penny stocks can be especially volatile. When you’re playing pot stocks that aren’t even listed on a major exchange, however, you’re increasing the potential risk by several factors.

By not being on a renowned exchange, investors are opening themselves up to a company that has not necessarily been appropriately vetted.

By no means does that imply that ACAN stock is illegitimate.

After all, there may be perfectly justifiable reasons as to why ACAN stock is not listed on a major exchange.

But for me, it’s an added layer of risk that may not necessarily be worth the reward.

The company does have pretty significant upside, so taking the chance may be the right move for some investors. Just be aware that there are certain risks that come along with buying OTC penny stocks.

For those looking for an alternative marijuana stock that offers exposure to the U.S. market, let’s take a look at CannaRoyalty Corp (OTCMKTS:CNNRF, CNSX:CRZ)

CannaRoyalty Stock

CannaRoyalty stock has performed very well over the past month.

Maybe not as well as ACAN stock, but the company has still seen a 25% increase over the past month and it is making what I believe is a more sustainable run.

Chart courtesy of StockCharts.com

CannaRoyalty operates essentially as an investment firm in U.S. marijuana companies, but enjoys a listing on the Canadian Securities Exchange on top of being available over the counter as well.

That alleviates one of my main concerns when looking into the ACAN stock forecast.

On top of that, you have a good broad-based exposure to the U.S. marijuana market as CannaRoyalty stock is buying stakes in many American pot suppliers.

If you’re looking for the biggest gains possible, then the Americann Inc stock price shows that it is more likely to see massive swings—but that sword cuts both ways. It will have higher highs but also lower lows.

CannaRoyalty stock, on the other hand, allows an investor to gain exposure to the U.S. marijuana market and see massive returns, but also be less at risk of losing it all.

Case in point: While ACAN stock has seen a huge gain in recent weeks, CannaRoyalty stock has performed far better over the course of 2018, gaining about 44% compared to the roughly 10% gain by Americann.

Analyst Take

Investors should be finding ways to gain exposure to the U.S. marijuana market if they can. It’s a smart move for pot bulls as it allows them to have a counterbalance to the volatile swings in the Canadian marijuana sector.

But investing in marijuana penny stocks that are only listed as OTC generally gives me pause.

It’s not a hard and fast rule that all these companies are less than legitimate. Far from it. But it does give me cause for concern.

If you’re okay with an added bit of volatility as well as uncertainty, then ACAN stock could be one of the better performers for you this year.

But if you’re looking to get into the U.S. marijuana market but would rather have a safer pick, CannaRoyalty stock offers you that option.

The marijuana industry is very heavily focused in Canada at the moment, but the burgeoning U.S. market is presenting itself as an enticing draw for investors.