Barron's On: Marijuana Stocks

02/18/19 09:17 AM EST
  • This weekend's Barron's cover story looks at the prospects for U.S. marijuana stocks.
  • While there may be options for eager investors, Barron's recommends caution.
  • A companion article discusses the progress toward federal approval.

This weekend's Barron's cover story, "You've Got to Be High to Buy U.S. Marijuana Stocks" by Bill Alpert, suggests that though several companies are vying for leading roles in what could be a $50 billion business, it's too early and the outlook is too uncertain to pick winners in the cannabis market.

Investors interested in U.S. cannabis companies face a daunting challenge, says the article, as marijuana use remains illegal under federal law. "It's difficult to do due diligence on these operations right now," says one expert. Sorting winners and losers so early on is virtually impossible, so better to wait and see how many of these outfits can turn a profit. But for investors who can't wait, there are options.

See Also: Barron's Picks And Pans: Data-Center, Robotics And Pot Stocks And More

See what made Canopy Growth Corp (NYSE: CGC) and Tilray Inc (NASDAQ: TLRY) among the industry's favorite stocks so far, as well how several other up-and-comers have fared, who is running them and what the risks and the prospects for those companies may be.

Much of the industry is based in or focused on Canada, where recreational use of marijuana products is legal. However, investing across the border comes with its own risks and downsides.

"When the prohibition of alcohol ended in America, the booze business was no doubt as chaotic and exciting," says the article. For investors thinking of experimenting with U.S. pot stocks, see why Barron's advises, "better to wait for some of the smoke to clear."

This weekend's edition includes a companion article, "U.S. Marijuana Sellers On a Tortuous Path to Widespread Approval."