- (0:40) - The Pot Stock Mania Continues
- (3:20) - Marijuana Cultuvating Companies: Whats Exactly Happening?
- (7:00) - Beverage Giants Pushing Into The Cannabis Industry
- (11:10) - The 2018 U.S. Farm Bill: Hemp Legalization
- (20:50) - What Can We Expect From 2019?
- (26:45) - Episode Roundup: ACB, CGC, CRON, TLRY, MO, STZ, SMG, GWPH, CF
Welcome to Episode #161 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Zacks Stock Strategist, and the editor of Zacks new upcoming newsletter the Marijuana Innovators, David Borun to discuss the events of 2018 that took the marijuana industry in a new direction and what it will mean for investors getting into the pot stocks in 2019.
2018: The Year of Hope
2018 was filled with great expectations for pot stock investors. Canada was set to legalize the recreational use of marijuana on October 17.
In anticipation, the publicly traded pot stocks like Tilray TLRY, Aurora Cannabis ACB and others saw big gains.
But October 17 came and went and the “hope trade” turned into the “reality trade” as now companies had to execute in an environment that was still fraught with different regulations and expectations.
The hot pot stocks also saw big declines in the market correction at the end of the year.
Is this a buying opportunity in some of the names?
2019: The Year of Reality
There seem to be more opportunities than ever before in the cannabis industry. The American Farm Bill , which was signed by President Trump into law on Dec 20, 2018, could also have a big impact on the agriculture and consumer product industries.
The bill classified hemp as an agriculture commodity and removed it from the DEA’s list of controlled substances. This will free up farmers to grow hemp, at least in the states where it is currently legal to do so, which must have less than 0.3% of THC.
Hemp can be used in a variety of ways including in clothing, can be put in food and drink, as a supplement and in make-up and beauty products.
But it’s wrong to think that companies will just jump into the hemp market. The FDA has already warned that food and drink products with CBD must get FDA approval.
In 2019, while growth opportunities are there, the stakes are getting much higher. That’s why investors might want to go with some of the established names already in the industry.
3 Stocks Already in the Cannabis Industry
1. Constellation Brands STZ was one of the first in when it took a big stake in Canada’s Canopy Growth with the purpose of making new beverages.
2. Altria Group MO, the tobacco giant, just made waves by announcing a 45% stake in Canada’s Cronos Corporation. That’s a $1.8 billion bet on the cannabis industry.
3. GW Pharmaceuticals GWPH is a British drug company that is the first to get a cannabis drug approved. It’s cannabis drug, Epidiolex, is used by epilepsy patients.
2019 should also be a big year with new companies jumping into the cannabis fray.
What else should you know about the pot stocks in 2019?
Tune into this week’s podcast to find out.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Constellation Brands Inc (STZ) : Free Stock Analysis Report
GW Pharmaceuticals PLC (GWPH) : Free Stock Analysis Report
Altria Group, Inc. (MO) : Free Stock Analysis Report
Tilray, Inc. (TLRY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research