Once upon a time I wrote an article describing why I don't invest in marijuana stock. Keep in mind, I'm in now way a financial expert (my 20 year old car is proof of that!). However, I do know a thing or two about marijuana, and I have this crazy ability to 'see the obvious' as I always say. That last comment of course is sarcasm, as anyone with a brain and decent eyesight should be able to see the obvious.
When I'm talking about being able to see the obvious as it relates to marijuana stocks, I'm referring to one glaring problem with virtually every company offering stocks in the marijuana industry - there is no quality end product. Companies can have all the suits they want, and all the polished presentations, and the best marketing on the planet. However, if the end product(s) they are selling sucks, the stock isn't worth anything in my opinion. A good product that people want to buy is what makes a company worth investing in or buying stock from. Instead, most of what I see out there is just hype, and leads back to some junky end product that no logical person would ever buy.
I think that more and more people are seeing this. There are times when there is so much industry hype going on that stocks artificially rise in value in the marijuana world, but then reality sets in and the stocks plummet. The chart below, via Marijuana Business Daily, displays exactly what I'm talking about:
As you can see, stock prices spiked at the beginning of 2015 when there was a lot of buzz as to what the year would hold, and everyone was saying 'the sky is the limit!' Then reality set in, and the stocks started tumbling. Of course, stocks go up and down all the time, proven by the green and grey lines on the chart. However, The orange line, which represents marijuana stocks, basically nosedived throughout the year.
Eventually we will see some good marijuana stocks out there, backed by strong companies with strong products and/or services. However, the ones that I see out there almost always involve some type of CBD product that has low grade ingredients from overseas, or some type of product that would be more fitting for a pyramid scheme. That's not to say that there isn't a company out there that has a great product and also offers stocks, but I have yet to see it, for what that's worth.