"The marijuana and cannabis industry — sometimes referred to as the Wild West of investing — is littered with high-flyers, potentially over-valued companies, and even scams," the stock brokerage firm said in a three-minute video posted on its Youtube account.
Young traders have flocked to stock trading apps from companies like Robinhood and TD Ameritrade to cash in on the hype around marijuana stocks.
For mom-and-pop investors, the options may be riskier, given that retail investors can access the marijuana market mostly through volatile Canadian stocks such as Tilray, a Canadian marijuana producer that went public in July at $17 a share. Speculators drove Tilray up to $300 in mid-September before it slumped to $140 or so on Friday. Beware this overhyped weed stock.
The Securities and Exchange Commission also issued a stern alert about marijuana stocks in early September, warning of fraud and market manipulation.
Philly locals
You can't get away from Tilray (NASDAQ:TLRY). The Canadian marijuana stock makes news when it goes up, which has happened a whole lot over the last couple of months. And it makes news when it goes down. Tilray has done a good bit of that, too, over the past few days, at one point losing over half of its market cap.
This year, the U.S. is expected to generate more than 85% of total global marijuana sales. While that percentage will likely decrease as the Canadian recreational cannabis market and medical cannabis markets in Europe grow, the U.S. still is probably going to make up three-quarters of total global marijuana sales well into the next decade.
You've probably seen the incredible gains racked up by some of the largest Canadian marijuana stocks in recent weeks. The market caps of several of these stocks are now so great that even investors with the most optimistic views about the prospects for the cannabis industry are leery of buying.
But I think that there still are quite a few good picks that can reward investors over the long run from the cannabis boom without paying through the nose. You just need to focus on companies on which the spotlights haven't burned so brightly.
Let's first differentiate two actions states have taken with respect to marijuana. Decriminalization refers to the relaxation of criminal penalties associated with personal marijuana use. Oregon was the first state to decriminalize marijuana in 1973. The state imposed just a $100 fine for possession of up to an ounce.
Over the next 15 years following Oregon's legal change, at least a dozen other states decriminalized marijuana. But decriminalization merely lowered or removed the sting from anti-marijuana laws. Manufacturing and selling marijuana remained illegal.
Reefer madness has gripped Wall Street.
Investors are craving marijuana stocks as Canada prepares to legalize cannabis in October 2018, leading to giant gains for Canada-based companies listed on U.S. exchanges. Some experts are concerned that the ending will be a buzzkill.
Increased mergers and acquisitions among the Canadian cannabis market ahead of weed going legal next month. Motley Fool Canada Investor Analyst David Kretzmann explains the market activity and his outlook for this budding industry.
As of September 2018, marijuana use is legal in some capacity in 29 states. This has opened the door for thousands of new enterprises in this industry, from dispensaries to manufacturers of marijuana production equipment to business and legal consultants with an expertise in this field. So, there are lots of companies to invest in.
In a press release, The Horizons Marijuana Life Sciences Index ETF (HMMJ), which offers direct exposure to North American-listed companies with business activities in the marijuana industry, said its total assets under management have grown to more than $1 billion Canadian dollars — $760 million U.S.