Investors who only want to wade into the cannabis stock market have a solid option
You must be clear about what investment risk refers to. It is the volatility or change in the value of the investment, which can be downward or upward. The riskier an investment is, the greater the possibility that its value will increase or decrease. The cannabis industry has a high-risk rate as many companies are not really profitable and finance their growth through stocks or shares. However, some analysts have identified one stock whose risk is extremely minimal, making it a special candidate for those looking to join the cannabis space for the first time.
There is no doubt that a safer option for investors is to target large companies that have exposure to the marijuana industry. Alimentation Couche-Tard seems to be establishing itself as a stock that every cannabis investor should consider. This Quebec-based convenience store giant has a presence in 24 countries and territories around the world.
With more than 14,000 stores, mostly under the flagship Circle K banner, this firm seems to have its feet firmly on the ground, making it impossible to move even when the winds blow against it. Over the past 12 months, Alimentation Couche-Tard has been able to generate $68 billion in revenue and its earnings remain more than steady.
Cannabis has become a sector of focus for this company. Even before Canada gave the go-ahead to recreational marijuana in 2018, the company was considering selling marijuana in its stores. It has been doing this bit by bit after shaking hands with several cannabis businesses.
One of them is cannabis retailer Fire & Flower, where Couche-Tard already has a 35% stake. Noting that convenience stores cannot stock cannabis products, the company announced a pilot program last year in which Fire & Flower would launch new locations alongside Circle K stores.
A similar operation could soon be coming to Florida with a partnership with Green Thumb Industries. Knowing that this multi-state marijuana operator has a presence in 15 key markets across the country, this is a partnership that could help extend beyond Florida.