We have analyzed this space since it became popular in late 2018. Right now, it is very high-risk because the industry is still in its infancy. There are a lot of players who probably will not be around once the market for recreational marijuana becomes more enticing to big tobacco companies.
For scale, the global legal marijuana market is only $17.7 billion dollars, which is still sparse compared to the $932 billion dollar global tobacco industry. It is hard to determine which marijuana companies are setup to withstand the “big money” competition that will inevitably enter the industry in the coming years.
It is important to consider that the trading of single stocks is always high risk. One might have a more predictable experience looking into a Marijuana ETF to add a bit of diversity.
We are cautiously optimistic regarding the future of marijuana, but we also have to consider the great risk that comes in this space during every election and congressional vote.