As of April 2017, twenty-six states and the District of Columbia currently have laws broadly legalizing marijuana in some form. Three other states will soon join them after recently passing measures permitting the use of medical marijuana. Those states that have not legalized it are in the process of at least reforming their cannabis laws.
While state legislators are eyeing a possible tax windfall from legalization, many Americans are being drawn to marijuana because of the proven health benefits. In fact, a recent poll shows that 90% of Americans support medical marijuana.
Today, I’ll be reviewing several stocks in this space and as always, you’ll want to use key technical indicators to time your entry and exit points.
The first stock is U.K. based GW Pharmaceuticals (GWPH) and its considered the bell weather stock in this space having been public for 4 years and having a $4 Billion market cap. This is a Biotech company that develops cannabinoids for the treatment of cancer pain as well as products providing symptom relief for MS patients. While the company is far away from producing earnings (similar to many Biotech companies), interest in the stock has picked up lately as can be seen below.
DAILY CHART OF GW PHARMACEUTICALS
The second company is Medical Marijuana Inc. (MJNA) and it was the first company of its kind to go public. This stock trades on the OTC and is a penny stock (meaning it trades below $1) so if you have the appetite for the huge swings these penny stocks provide, take a look at the chart below.
This $382 million market cap company just reported record 2nd quarter sales of $6M yesterday however, these sales have yet to translate into earnings as the company is plowing money back into research and development.
Daily Chart of Medical Marijuana Inc.
There are other interesting companies in this space as well such as mCig, Inc. (MCIG) which just reported record sales from its Grow Contractors building subsidiary as well as Marijuana Companies of America (MCOA) which offers high demand CBD (hemp oil derived) products. While both of these companies have charts that show uptrends, they are a bit more volatile than the others.
Even though all of the stocks reviewed are interesting, they don’t fit the high-quality growth stock profile that MEM Investment Research generally works with. As with all speculative stocks, investors are advised to keep their stops tight should they decide to invest in these stocks.
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Warmly,
Mary Ellen McGonagle
