E Stem Holdings: Getting In On Marijuana's Ground Floor


I've begun looking seriously into investing in marijuana. Not just because it seems on trend and more comprehensible than cryptocurrency, but because it seems like a literally down-to-earth arena with ground-floor opportunities everywhere we look, and therefore something to know more about. 

There are big companies whose rise and fall and rise and etc. are legitimately described as 'parabolic' - 'hot' stocks like Tilray (TLRY), Cronos Group (CRON), Canopy Growth (CGC). That kind of high-risk investing is out of my league. I also don't know enough about the national recreational market in Canada to invest in companies who are focused there, but there's been a lot of coverage of the 'flower glut' as it seems everyone and his brother tried their hand at growing weed for would-be Canadian stoners. The other major group of established companies are pharma-related, in medical marijuana, and range from Big Pharma buying in, to novel drug development still contingent on approvals that may or may not ever come.

What's more advantageous about the Canadian marijuana boom is a more welcoming environment for companies looking for financing, with many young American companies preferring the clearer regulatory environment north of the border to begin their listings. In the US, relatively few companies in this relatively new industry are listed on the major exchanges. Listing on the OTC Markets can be the only path open for newer companies with lower volume, but it can make it harder for investors to get information, as requirements aren't as stringent. 

"Just because a cannabis company is trading on the OTC Markets Group, that doesn’t mean that they’re a sketchy stock, it just only means that it’s the only place that they could go. So there are some good names in the OTC Markets group, so don’t let that scare you away. And having said that, there are some less than stellar names in the New York Stock Exchange trading there." - Debra Borchardt, Founder and Editor-in-chief of Greenmarketsreport.  

Mrinalini Krishna writing for Investopedia as recently as last week had this succinct summary: 

While our northern neighbors may have decided to legalize marijuana with sales starting October 17, 2018, it remains illegal and classified as a Schedule I drug under Controlled Substances Act at the federal level in the United States. However, with more and more states voting to make cannabis usage lawful in some form, marijuana regulation essentially is a hot mess. 

What caught my attention in Motley Fool's recent analysis of the things that "really matter" when looking to invest in marijuana stocks is the desirability of a company having product diversity - i.e., not relying only on crops, or breakthrough drugs, or recreational drug approvals. Much of the advice is what should matter in any investment: the potential for profit margin, established financing, a reasonable balance sheet, real assets. 

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Disclosure: This article is part of a new “UnderCovered” series of exclusive articles featuring companies with limited coverage. Authors are compensated by TalkMarkets for their time, and ...

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Leslie Miriam 7 months ago Member's comment

$STMH sounds very promising...

Craig Richards 8 months ago Member's comment

This is smart. It's always the solutions providers that always prosper the most. Even when times are tough for the industry, they do even better.

Cannabis Stock Buyer 8 months ago Member's comment

Kate Hayden, $STMH has lost a lot of value since mid 2018. Yet the current #Stem expansion efforts and growth opportunities sound rather promising. Would you say this is a buying opportunity? Or should I wait to see if it goes a bit lower first?

Barry Hochhauser 8 months ago Member's comment

Impressive.

Weed Investor 8 months ago Member's comment

#StemHoldings sounds like a promising opportunity in this burgeoning industry. Definitely going to take a closer look at $STMH

Bill Johnson 8 months ago Member's comment

Sounds promising.

Adam Reynolds 8 months ago Member's comment

Sounds like a promising way to start off the new year!

Wendell Brown 8 months ago Member's comment

It would be great if you could give this treatment to some more companies. I'm interested in microcaps that aren't penny stocks.

Donald Kaplan 8 months ago Member's comment

Good article. The lack of regulation has turned me off from #cryptocurrencies as well. I too think #cannabis investing will be the next hot trend. But unlike the uncertainty surrounding cryptos, it is far more likely to pay off. I will take a closer look at $STMH.

Michele Grant 8 months ago Member's comment

I agree. The future of #crypto is still very uncertain in my book. It's too difficult to know which if any coin will dominate in the future, especially with the lack of regulation. But the general trend seems to be that #cannabis will continue to grow and become legal in more and more locations.