Investing in marijuana: a growing interest

Topic was covered broadly on cnbc this am.

Bunch of penny stocks out there like HEMP, MJNA, etc. Market Caps of $113M and $280M respectively.
But some are more traditional like CANN, CANV. Market Caps $285M and $1.75Bn.

Thoughts on industry opportunities/risks?

quote:

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Investing in marijuana stocks may be a growth play for the long term, if you can stand the risk of getting burned in the short term.

It’s not that you can’t make money right now. While Canada’s S&P/TSX composite index has risen nearly 5 per cent year to date, at press time, Hemp Inc. has surged 563 per cent, Advanced Cannabis Solutions Inc. has soared 423 per cent, Medical Marijuana Inc. has jumped 92 per cent and GW Pharmaceuticals Plc has gained 35 per cent.

The share prices have been propelled by the success of Colorado’s move to allow retail sales of marijuana since Jan. 1, and the belief that a global shift toward greater acceptance of the drug will accelerate.

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The legal market for cannabis in the United States alone could expand 64 per cent this year to $2.34-billion (U.S.), and 700 per cent to $10.2-billion over five years, according to cannabis industry research firm ArcView Market Research.

“Business is very good,” says Robert Frichtel, president and chief executive officer of Advanced Cannabis Solutions, which rents out space to grow marijuana crops. He says he’s watching as states including Massachusetts, Illinois, Florida and New York consider legalizing marijuana. “We are in the early stages of what’s going to be a very large industry over time.”

But most publicly traded cannabis companies are available in the United States as “pink-sheet,” penny stocks with no financial standards or reporting requirements. Buying and selling their shares can be complicated. Brokerage analysts don’t cover the companies and most money managers are barred from owning them.

And the U.S. Financial Industry Regulatory Authority warned investors of potential scams, given the rising interest in the industry.

LINK

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