Fringe companies could help investors test the waters before diving in
Some investors are still a little concerned about going fully into marijuana stock trading. There isn’t a long track record from which to draw analysis and the uncertainty of regulations in the U.S. is causing some to stay away, but there are some alternatives. Instead of targeting marijuana stocks directly, perhaps some companies that support the marijuana industry are the solution.
Consider Scotts Miracle-Gro, for example. It’s a $4.5 billion stock and a name that is easily recognizable across the country. It might be known for personal lawn care, but the company also offers an array of products to help controls diseases and pests, as well as to be used in seeding and hydroponics.
Miracle-Gro has become a go-to product for the marijuana industry. It has its own cannabis subsidiary, Hawthorne, which is poised to benefit greatly from the passage of the 2018 Farm Bill. The company has already started strong and Hawthorne has seen its share prices increase 33% year-to-date. Hawthorne has seen its profits increase 84% already this year.
Real estate investments are typically a safe bet and a real estate investment trust targeting the marijuana industry is fortifying that position. Innovative Industrial Properties (IIP) owns properties in California where state-licensed medical marijuana is grown and was the first marijuana stock to be listed on NASDAQ.
Analysts expect sales growth for IIP of around 109% for the first quarter and the company’s stock has increased 211% over the past 12 months. It pays a dividend of 1.8%, which makes it a little more attractive than most.
Marijuana is creating an entirely new market for consumers and for investors. Think outside the box when deciding where to place your money and you should be able to come out on top.
