In recent years, the cannabis industry is gaining wider acceptance as it has been legalized in some states. If you are looking into the significance of the cannabis industry on the economy and watching how the cannabis business is unfolding, you are on the right track. In this episode, Tony Frischknecht talks about the development of cannabis companies and investment opportunities with cannabis trading. Based on his life-changing experience as a cannabis investor, he offers tips on what to look for in choosing cannabis stocks in the market. Don’t miss today’s episode and get insights and understanding of the status of cannabis stock in the current political and economic condition of the state.
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Highly Recommended: What To Look For In Buying Cannabis Stocks
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Top Three Things To Look For
There’s always a lot of things happening, the ups and downs in cannabis, but we’re starting to see some momentum. I’m going to share with you a couple of incredible stocks that I’ve seen. One of them that I’ve seen is about 134% gain since Christmas 2020. There’s another one that gained about 24%. That’s not extremely huge. However, we’re seeing momentum happening like that. Before I share those names with you, I want to give guys the top three things to be looking for when you’re choosing cannabis stocks. Some of the stuff that I look at when I’m choosing to buy.
You can go to ETFs. ETFs are good because they spread your risk throughout tons of different cannabis stocks. However, from what I’ve seen is the only way you’re going to make some real money is if you centralize it. This is good for risks. Depending on your tolerance for risk, an ETF may be a better choice for you. What’s nice about an ETF is that they’re professionally managed, so there are companies that are adding and subtracting different cannabis companies to create a better portfolio in the end and better return but you’re also going to have winners and losers in the same one.Making some big mistake comes along when change and something new is about to happen. Click To Tweet
If you’re going to lose, it’s not going to be that bad because you have some winners. It balances it out. Diversification is what everybody always talks about. The problem with diversification is you can never hit big. When I say hit big, some stocks out there are doubling, tripling or quadrupling, 10X, you don’t generally see that in an ETF. It’s quite a bit of slower growth. However, with the volatility of cannabis, we’re going to see some significant growth, but not as much as you would see in one stock. The downside of that if you go with one stock and your stock that you choose takes a big dive, you’re going to see that as well.
When you’re going into this, understand the volatility you’re dealing with in cannabis if you’re starting. The volatility swings are big. You’re talking with dollar volume. You could see $10, $20, $30 swings in one day. If you’re not used to that and waiting that out, an ETF is a better option for you. The mental game with volatility is something that you have to work up to. If you are used to trading stocks, I’m not telling you anything you don’t already know. The next thing is to do your homework. There are hundreds of companies out there claiming to be the biggest cannabis company in the world or the US, either one. They’re all so different. What I suggest is you find 2 or 3 that you like and follow them for a few weeks. See if there is some stability or somewhat of a game, so follow and look at them. Don’t jump in and buy right away. If you like them too, while you’re following them, you needed to go look in and dig up their current financials. What they did in 2020 is significant.
You should be able to see some growth. If you’re not seeing growth in them over 2020, stay away from them. 2020 has been a massive growth here for cannabis. With the lockdown, we saw huge sales happening. If you aren’t familiar with Conal Rosanbalm, I’ve had him on the show a couple of different times. He’s a wholesaler. We have discussed the different numbers there, and what sales he has been doing as a wholesaler and they’ve been massive. The market is taking an upswing in legalization. In Colorado, we’re seeing a huge growth. Also, some of the other States that start launching, they are still see very high pricing for their product wholesale-wise, too. Everything is up in a lot of markets so keep that in mind.
I have a warning I want to share with you guys too. Most companies have only been listed for a few years so they have short track records. That’s one thing that makes it nervous about investing in cannabis stocks. There are going to be some stuff that comes up over the next couple of years where these guys are going to be getting into financial trouble. They’re not going to be recording things right. They’re going to be making some big mistakes. This comes along with the growth of a new industry and we’ve seen it happen. I’ve been investing in cannabis stocks since 2016 and I’ve seen it happen over the last few years, but now we’re getting into a point where we’re seeing some large consolidation happening and they call them MSO, Multi-State Operators.
Back to do your homework, make sure you keep an eye on your companies as you invest and make sure you understand the financials moving forward. Always keeping your eye on what they are doing quarterly. What we’re seeing is there is some there’s consolidation happening with some of these big companies. As they merge with other companies, there’s going to be some transitional issues in creating one big company. If they’re going to be able to adapt fast enough, you should be able to see that in their sales growth because they’re going to be fluid with each other, working well together and creating a stronger bottom line at the end of the day. What we look at is always the bottom line at the end of the day, whereas the profitability.When you are faced with something new and unknown, always do your homework and educate yourself. Click To Tweet
With those three things said, I want to give you what you’re waiting for. The big company that has been smashing through some huge points is Tilray. Tilray was one of the very first ones to be listed on the New York Stock Exchange. This was back in 2016, and they saw a huge gain. When Canada went legalized in October of 2016, they were, at one point, shot up after a month of legalization. They were pushing close to $330 per share, which was insane. People were going nuts. It was a bubble that was being created and they got popped. Their stock went down to $2.43 where it sat for quite a long time and sat under the $10 mark until we saw it over double. It increased to 134%. A lot of this has come from Aphria, which is another big cannabis company and they’re preparing to complete a merger of the two companies. Tilray stock is going to be the one that will continue the name on the stock exchange so keep an eye on that one. It’s trading at about $18.50 to $19. If you got it in $2.43, you would be extremely happy. There are a few that have, but they waited because the volatility changed. They’ve had to be patient. Patience is a big part of this.
The other one that I see some huge potential and growth happening is Cresco Labs Inc. They were pushing close to 30% in gains, which is huge. They sat for a long time. They were in the $2 mark and they shot up to $8. It went from $8 to $14. It stabilized a little bit, but I see that our future is going to be bringing both these companies some significant growth. Due to the climate that’s happening in cannabis, several things are happening to create a perfect storm in cannabis. What I mean by that is we have Biden and Aphria coming into office here who are Democrats.
Politically, we’re looking at the future of having the tiebreaker in the Senate. A lot of the reason why we haven’t been able to pass any cannabis laws through the Senate is because Mitch McConnell is out. It’s 50/50 Republican-Democrat. Now that we see the tiebreaker is going to be the presidency. Kamala will be a big proponent and pushing some of these bills through the Senate, which is awesome for the cannabis people. That has been something that we’ve been waiting for quite some time. Throughout the whole presidency of Trump, we’ve been on edge because it’s so far right. Fortunately enough, Trump had a lot of other trouble he could cause in other places and it didn’t happen to be cannabis, which is great for us. I’m happy about that.
The second thing is sales. As I mentioned before, it had been soaring in 2020. You guys out there that are in the industry that are selling on a day-to-day basis, I imagine you’re seeing exactly what I’m talking about. Another thing we’re seeing is institutional investors. They’re starting to pour in the market. That’s why I think we’re seeing this growth happening. They understand some of the stuff that is coming regulation-wise and politically and they’re like, “It’s time.” For those of you who haven’t invested in small stocks or bearing new stocks, once you see these guys start piling in at these rates, then you’ll see this price gets driven up and you don’t want to be the one that sits on the very last end of it and be like, “I want to get in now,” because you’re usually buying it at the top. That’s not the time to buy-in. That’s why I believe, more than ever, right now is the time to get involved in some cannabis stock purchases. There are a couple of names that I gave here to you guys, but get involved somehow if you are looking at cannabis investments. Get involved in some stocks somehow soon.Diversification is not putting your eggs in one basket. Click To Tweet
In 2021, nobody can predict if it’s going to legalize or get rescheduled on a federal level, but it could. The momentum we’re seeing is a matter of when. I know we’ve been saying that for a while, but some of you are going to be shocked when legalization happens federally and you’re going to be like, “I can’t believe it happened.” For those of you who are new to cannabis, it’s been legalized in Colorado for years. During the election, we had several States that legalized, like Montana, Arizona, and South Dakota. There are a couple of other ones but I can’t remember exactly.
We’re seeing that momentum of that wave. We’re over that 60% threshold throughout the US so it’s happening. You don’t want to buy it when we’re at $90 or $100 because it’s a for sure thing. Step in now and take advantage of reading and do something about it. I don’t care what stock you guys jump into but look at something and take advantage of this opportunity. There’s not a whole lot of time left. I’m telling you, once these go big, the stocks are going to be out of reach for most investors. Right now, you can get in for $10 or $20 on a stock that is easily going to hit $100. If you could find the next Amazon of Cannabis, your $2,000 investment could turn into millions if you can hang on to that. Remember, this is the time to take some risk.
Even if you have $1,000, that could turn into hundreds of thousands over the next five years as every state adapts and every state legalizes. It is going to build this multibillion-dollar business across the US and the world. Some companies have been working in this market through Canadian companies that are truly American companies ready to explode. They can’t wait. Once this institutional money gets all inputted into the cannabis economy, you’re going to see these companies explode and be able to take and reinvest in these companies. They’re going to start taking over the industry quickly. It’s hard for me to think because some start as a small store grow owner and look at where it’s going to be. It’s going to be hard for the small mom and pops to compete. They have their areas. Hopefully, you’ve picked a good area. I don’t want to wish anything bad towards you and your business. If you’re smart, there are still ways to make it in this industry, but you got to make sure you align yourself correctly.
I truly believe that if you guys spend some time and focus on a couple of stocks in cannabis, it’s going to change some of your lives. It has mine and I want to see the same for you. Please go check some of these out. Do your homework. Make sure you stay focused and always watch your investment. Thank you so much for reading. Plant Problems appreciates all that you guys bring in and everything that you’re bringing me. I will see you again next week for a new episode. Reach out to us at PlantProblem.com. We look forward to hearing any comments or concerns that you may have. Please let us know, we look forward to it. See you guys next time.