Munson on weed stocks: '90% of them are frauds'
Cannabis stocks have continued to gain traction over the past several months, with companies such as Tilray (TLRY) and Canopy Growth (CGC) spiking over the last few weeks in ways that cryptocurrency-related stocks did in 2017.
“We’ve heard the now-popular joke in the last week that cannabis is the new crypto,” Yahoo Finance’s Dan Roberts told Lee Munson, president and CIO of Portfolio Wealth Advisors, on The Final Round.
“I love that,” Munson said, noting that weed stocks are the place to be speculating right now as a seemingly viable industry begins to emerge.
“Good for you if you bought Tilray. … Good for you if you bought Canopy Growth,” Munson said. “But we’ve got another 500 securities out there, and 90% of them are frauds and just aren’t going to make it.”
‘The largest company in the world by Christmas’
Shares of Tilray, a Canadian cannabis company, have become a fascination among investors as the stock has gained more than 700% since being priced at $17 during its July IPO. The stock shot up more than 50% on Wednesday.
Tilray, which focuses on “medical cannabis research, cultivation, processing and distribution,” according to its website, tripled in value in September alone.
Tilray now has a larger market cap than 50% of the companies in the S&P 500. If it continues at this pace (366,860,734% annualized return since its IPO), it will surpass Apple as the largest company in the world by Christmas.
— Charlie Bilello (@charliebilello) September 19, 2018
“We’re in the initial stages of this,” Munson says. “There’s not a lot of public companies outside the two that we keep mentioning” — Tilray and Canopy Growth — “that really have … a business where they’re raising a lot of money, and they’re making things happening.”
‘Either fly to the moon or go to zero’
Yahoo Finance’s Myles Udland explained that while weed is the new blockchain, the difference is that “there is something real when it comes to cannabis companies.”
According to Munson, investors should be very cautious when investing in the marijuana landscape. In fact, he said that he “wouldn’t buy any cannabis stock” because of the risk.
“If you doubled your money … sell half your Canopy Growth. Sell half your Tilray,” Munson mused, adding that the money would be better off in “the real stock market … and then let that stuff either fly to the moon or go to zero.”
Read more: Weed is the new blockchain