The CNBC stock market expert recommends investments in cannabis stocks
As the host of CNBC’s “Mad Money,” Jim Cramer is known for his expertise in predicting stock market movements – as well as his, at times, zany sense of humor. On Monday’s episode of his show, he dedicated some time to look at the growing marijuana industry, offering his take on what’s in store and giving a little sage advice – be prepared to add marijuana stocks to your portfolios.
Cramer leads into marijuana, stating, “I still think that legalized weed is one of the great growth stories of our era. So, for those of you who want to speculate on the bull market for bud — hopefully at lower levels than where we are right now — I’ve got five predictions for the future of the marijuana industry.”
He expects there to be more legalization this year, which is a no-brainer. Several states, and even the federal government, have already indicated that there could be some serious movement on the legislative marijuana front this year.
Cannabidiol (CBD) will also see a growth explosion this year, thanks in part to the 2018 Farm Bill. He states that the bill will “give the CBD market a major boost” and that there is “enormous” potential for the product. He adds, “You can put it in food, you can put it in beverages, you can put it in skincare. Immediately after the farm bill passed, Canopy Growth, the best-of-breed player in the Canadian cannabis space, announced it would be entering the United States to play the CBD market. So expect to hear a lot more about CBD as 2019 goes on, because I believe this could be a massive opportunity.”
2019 is also going to feel like Wall Street for marijuana stocks. He explained, “How will these leaders establish themselves? In part, they’ll do it by scooping up smaller players. Canopy already started going on a deal binge in November. I think that’s going to continue through this year, too.”
Calling on his humorous side, Cramer said that there will be more branding in the industry. He stated, “I predict 2019 will be all about branding for the pot industry. Or, as Mel Brooks put it in Spaceballs, ‘merchandising, merchandising, merchandising.'” He added that the biggest names in the industry will become household names.
Lastly, there will be more marijuana investments and more credit given to expand the industry. Those credits will most likely go to “marijuana-adjacent” biotechnology companies, such as GW Pharmaceuticals, looking to build their cannabis businesses.
Closing out the segment, Cramer signed off by saying, “The cannabis cohort is red-hot right now — too hot for me, frankly, to recommend, at least at these levels, and I have been behind Canopy the whole way — but the next time the group pulls back, I want you to think about where this industry is headed. This is a huge growth business, so I want you to put Canopy and Cronos on your shopping list… and wait patiently for the next sell-off because I need you to have a better entry point.”