Best Weed Stocks To Buy 2021 - Best Stocks To Buy Now - YouTube

hey guys how's it going it's Andy  from Magoo investing happy Thursday  

in today's video we're going to be talking  about a topic that I’ve been putting off for  

I guess over a month at this point since election  day today we're going to be talking about weed  

stocks and weed stocks have been something that  I’ve always kind of followed since my investing  

journey began two years ago because I thought  it was really interesting hopping on robin hood  

and seeing that you could invest in legal weed  stocks and that just kind of kind of blew me away  

and so we've seen some things in the  past month that has probably made a lot  

of people consider buying into weed stocks  yesterday a lot of the weed stocks were up  

around 10 percent after the UN voted to remove  cannabis stocks from being a schedule for drug  

meaning that it was allowed for medicinal use but  not recreational and then with the last election  

in November we are now up to 15 states where wheat  is completely legal including Oregon where I live  

and now there are 36 states where it's  legal for medicinal purposes and in that  

last election we saw a couple states with new  jersey Arizona south Dakota and Montana that all  

legalized recreational weed we're starting to see  more states where weed is becoming decriminalized  

and in some places being fully legal so that begs  the question is it time to start investing in weed  

is it something safe and that's what we're  going to be talking about in today's video  

our neighbors to the north and Canada legalized  weed for the entire country back in 2018 and  

now we're seeing more and more states getting on  board and legalizing weed in their state so that  

begs a question is it worth buying into wheat  and cannabis stocks going into 2021 we're going  

to talk about in today's video so I’m going to  be talking about some individual weed stocks I’m  

going to be talking about some problems and trends  that we've been seeing with the overall industry  

and then I’m going to wrap up the video giving my  two uh stocks that I would consider buying when  

it comes to weed stocks because there's a lot of  them out there but there's only two of them that  

I would really consider buying going into 2021  and beyond so before we get started I do have  

to say that I’m not a licensed financial advisor  and this is not financial advice anything you hear  

in this video is just me giving my own opinions  on the stock market and you need to do your own  

research before making any investment decisions  also if you've been enjoying these videos really  

appreciate it with a like and subscribe button as  would help my channel out a lot also let me know  

what stocks you guys would like me to go over in  future episodes in the comment section down below  

so since the cannabis industry has become legal  in a lot of states it has been exploding in 2019  

there was between 11 and 13 billion dollars in  retail sales for medicinal and recreational weed  

that's expected to grow by 40 in 2020 an industry  is expected to have sales of 25 billion in 2024.  

uh so weed stocks have been traded for like  the entirety that I’ve been investing in the  

stock market uh but the problem is many of them  have not done very well the only stock that I’ve  

bought since I’ve been investing in the stock  market that has to do with weed sticker symbol  

MJ Stock (MJ Stock) which is the weed etf and I’m  going to talk about that later in the video but  

a lot of these companies have really struggled  in the past couple years so I kind of wanted  

to break down some of the problems that we've  been seeing with the industry and talk about  

some of the trends that may be looking like  it's becoming a better investment opportunity  

first I want to talk about Canada because that's  where a lot of the problems really originated  

one of the first problems that we really  saw in Canada had to do with supply problems  

and so we was legalized in late 2018 and  the Canadian government was not very quick  

on allowing a lot of these companies to open up  shop in some places it took months up to more  

than a year for some of these companies to start  growing and being able to sell these products  

this led to some companies like cantrust to  grow in five unlicensed rooms from October  

2018 to march 2019 and the CEO knew about it  and did nothing and got fired and then there  

were some major fines that got put onto the  company and it has not been doing very well  

so the supply is starting to come back in Canada  and we're seeing record sales numbers and that  

seems like a good thing right uh we're not  actually seeing that many great things coming out  

of Canada so 2020 has been tough for these stocks  for a couple reasons and one of the main ones has  

been competition uh as companies have seen this  wheat industry as like a gold rush there's so  

many different companies uh that are trying to get  involved with it and try to get a piece of this  

booming industry that's expected to grow by 40  in this year and up to 25 billion dollars in 2024  

and whenever you see a lot of competition  it usually leads to razor thin margins  

uh and really tough losses for the companies that  are trying to expand aggressively but are not  

making as much money as if there are only a couple  companies in this sector so for example Cronos  

Stock (CRON Stock) ticker symbol $CRON posted  10 million dollars in quarterly sales but posted  

an operating loss of 35 million and then the  company organigram stock (OGI Stock) ticker $OGI  

had 18 million dollars in that sales and was down  from 25 million a year ago and posted an operating  

loss of 100 million so we're starting to see some  improvements with the Canadian market in addition  

to the supply problem they also had a really big  dispensary problem I remember at the beginning of  

this year I talked about Aurora Cannabis Stock  (ACB Stock) and talked about how there was more  

dispensaries within the county that I lived in in  Oregon compared to the entirety of the providence  

of Alberta which had significantly more people in  it and so I saw an article talking about Canada  

has hit dispensary numbers and they finally hit  1 000 total uh but looking it up currently the  

state of Oregon which I live in has 700 which  accounts for the highest number of dispensaries  

per thousand people in the us when you look at  Toronto which has around 3 million people they  

have 3.8 dispensaries per 1000 people and Oregon  is sitting at 16.5 but it is getting better and  

so Canada has had a problem with supply the demand  has always been high but they've had problems with  

supply uh regulation problems and the fact that  there just aren't that many dispensaries out there  

and a lot of these companies that I’ve mentioned  are seeing increases in sales but their margins  

are getting so razor thin that they're posting  larger and larger losses which means they're going  

to need more financing which has become a huge  problem for them all right now let's talk about  

the us because as I mentioned more and more states  are starting to legalize weed overall and we're  

starting to see a boom when it comes to that but  similar to how Canada is having razor thin margins  

so is the us but it's for slightly different  reasons it's not mainly because of competition  

it's mainly because of the incredibly high taxes  that the government is putting on these products  

in some places like Illinois taxes on weed are  around 40 overall and here's a chart of some  

of the weed taxes in a variety of us states and  Portland Oregon where I live and a major problem  

with these high taxes is the fact that these  businesses it's creating lower margins for them  

and it's increasing the price for the overall  product that's being pushed to consumers and  

whenever you have a really high taxes on a product  that people can get elsewhere for significantly  

cheaper you usually get a black market and that  is what we're seeing across many of these states  

where wheat has become legalized so for example  in 2019 Californians spent 3.1 billion on legal  

weed but the problem is that they spent almost  9 billion on illegal weed for people that have  

options for buying cheaper weed most of the time  they're going to take that and so in states where  

wheat has become legalized they're losing out on  so much money because the taxes are so high it is  

allowing these black market behind the scenes weed  sales to go on and become a significantly more  

profitable business than these the legal means  of selling it and it's becoming a huge problem  

but the area that's really hurting a lot of these  dispensaries and this business so much has to do  

with the us and the way the banks are run and  while wheat is legal in Oregon for anyone that's  

been in one of these dispensaries before you'll  know that they only take cash and the reason  

behind that is because weed is still federally  illegal and it's considered a schedule one drug  

a schedule one drug is defined as a drug with no  currently accepted medical use and high potential  

for abuse which is one of the worst definitions  or the worst way to describe weed that I’ve ever  

heard it definitely has medicinal uses and  I compared a lot of the other drugs it's not  

very addictive at all especially considering  another one of the drugs that's in the schedule  

one uh is heroin so heroin and weed are considered  the same type of drug when it comes to the federal  

government which is just absolutely ridiculous  that we're still talking about these two and  

similar lights in 2020 and so since it is  federally legal for people like me that are  

going to be working in a an organization that's  mainly funded by the federal government that can  

be legally drug tested still even though weed is  legal in Oregon I can still get drug tested for  

weed and that's preventing a lot of people and a  lot of businesses from making more money but the  

main problem with weed being federally illegal is  it makes it really tough for dispensaries to get  

financial help from banks because banks are run  and operated under federal law which means that  

they're not able to help with companies that are  selling weed because it is illegal federally and  

their sins are getting so much assistance from  the federal government that just doesn't fly  

and so without access to banking it cripples many  crucial services that these small businesses need  

they don't have payroll credit or checking  accounts and no lending opportunities to expand  

their businesses also it means that they have to  pay their employees in cash and just makes life  

so much more difficult for these companies that  are running a legal business when it comes to the  

state but since it's federally illegal the amount  of banking options that they have are so limited  

yes you can have some of these regional banks but  they don't have some of the lending opportunities  

than you would have with a one of these major  banking companies so currently there is some  

legislation going through that's trying to fix  this and make it legal for banks to help out  

these dispensaries you have the secure and fair  enforcement banking act uh of 2019 or the safe  

banking act which was passed by the house but it  still has not made its way through the government  

fully and when you look at the reasons why the  head of the senate's banking community is led by  

mike Crapo of Idaho and when I put back up that  map of where wheat is legal and where it's not  

Idaho it is still fully illegal and that makes a  lot of sense could a new banking committee help  

this out potentially one of the main problems is  since it has to go through the senate still unless  

the democrats win both of the runoffs in Georgia  to make it 50/50 I think it's very unlikely for  

this to go through and so at this point wheat  is in a better spot than it was a year ago and  

much better than it was in two years but at this  point we still have some government regulations  

that are making it very difficult for this  business to succeed also some of these companies  

are not the most trustworthy you can just look  up all these weed stocks and there's a lot of  

different scandals that's affecting a lot of them  you have canopy growth stock (CGC Stock) ticker  

symbol $CGC which reported incorrect earnings  back in 2019 where they reported a significantly  

lower net loss than it really was Kushco Stock  in early 2019 had a very bad accounting error  

then there was a massive conflict of interest  between Aphria Stock (APHA Stock) where their  

CEO grossly overpaid for Latin American assets for  the company that resulted in the CEO stepping down  

so when you look at all these weed stocks there's  just such a wide variety of companies and the  

financial backing that they have you have stuff  like Tilray Stock (TLRY Stock) which has been a  

company that I’ve actually traded in the past on  one of these days where I believe it opened up  

at eighty dollars a share went up to 300 close to  200 I made 100 profit on that day and it was one  

of my favorite days trading in the stock market  but at this point Tilray Stock (TLRY Stock) is  

down significantly from that point and I would  probably stay as far away from it as possible  

then you have Aurora Cannabis Stock (ACB  Stock) which is one of the most popular  

weed stocks on robin hood and it was one of  the first videos that I made that reached  

over a thousand views at the beginning of this  year if canopy growth stock (CGC Stock) which I  

mentioned the problems and then you have  Altria Stock (MO Stock) which is ticker  

symbol $MO which mainly does stuff with tobacco  but now they're starting to invest more into  

weed products and it diversifies their portfolio a  little bit but when you put together a struggling  

business with tobacco with another struggling  business of weed stocks you got some problems  

and so not the best option out there and I want to  talk about the only two weed stocks that I would  

ever consider buying at this point if you've been  around this channel for a bit I’ve talked about  

health care stocks before and the reason why I  like to buy etfs for healthcare instead of trying  

to buy individual ones especially when people were  asking me to talk about stocks that would do well  

if their vaccine was approved I’ve always  said that I think it'd be better to  

take a stock or an etf that averages out all  of the healthcare stocks instead of trying to  

pick one because when you only pick one it's  a lot of large numbers when you're picking one  

sure it can double your money in a couple days  but also as a possibility of going down to zero  

dollars and when you have more stocks that are  getting piled into an etf it's less likely that  

you're going to lose a significant amount of your  money though it does limit your upside potential  

and the stock that I would buy if I thought that  weed stocks are in a great spot going forward  

would be MJ Stock (MJ Stock) which is the weed  etf which is currently trading for 15 and 74 cents  

and it is down eight percent on the year it  does have a dividend deal to 4.6 and I will  

show MJ Stock (MJ Stock) chartered compared to  all the other weed stocks and you can see that  

some of them are up like 60 some of them are  down 50 when you average them out you do get  

MJ Stock (MJ Stock) which is smack dab in the  middle which is still down on the year but I  

like this more than just picking an individual  stock a lot of these companies have had so many  

individual problems and the likelihood of picking  one that does well sure you could call it 50 but I  

would rather pick a stock that has a likelihood of  doing better than the chance of going completely  

towards zero so MJ Stock (MJ Stock) is one of my  favorite stocks when it comes to the weed stocks  

it's going to limit your upside potential but  it lowers your overall risk and then the other  

stock I would consider looking at is innovative  industrial properties stock (IIPR Stock) which  

is ticker symbol $IIPR this is a REIT which I  didn't know that they had any weed REIT’s which is  

a real estate investment trust and one of the main  things with REIT is that there are specific laws  

in place that makes it so that a certain amount  of the profit has to be paid out to shareholders  

and dividends so I’ve talked about $NRZ which is  a REIT that had a 12 dividend until it crashed  

when mortgage rates went towards zero but iipr  stock unlike a lot of these other reits that  

have been relatively flat uh it jumped 32%  in November and when I show the chart right  

here it has a safer looking chart than most of  the other weed stocks that we've talked about  

it actually looks like a normal stock they had  revenue jump of 197 percent in the last year  

and they've increased their dividend  significantly as I mentioned since it is an REIT  

it has to pay out most of their profit in the form  of a dividend so their last dividend paid out was  

one dollar and 17 cents a share and that gives a  dividend yield of around 3.5 percent in addition  

to it being up over 100 on the year so I love the  fact that it's an reit that pays out a dividend  

even when you have a stock that's not doing as  well the fact that they're required by law to  

pay out a certain amount of their profit uh as  a dividend gives me a little bit of stability  

even though this is a market that has a lot  of volatility so the only two stocks i would  

really consider are IIPR Stock and MJ Stock (MJ  Stock) just because it lowers your overall risk  

and since this is an industry that could continue  to increase over time you're still going to have  

that upside potential but it doesn't have as much  of a risk of your investment going towards zero so  

I think the weed stocks definitely in a better  spot than they were a year ago two years ago  

but they're still not smooth sailing at this point  I kind of compare this similar to how I was very  

hesitant to invest into something like an uber  or a lift just because when you have government  

regulations in between a company succeeding and  failing that's kind of out of the control of the  

company and so until we have some of these help  the assistance with the banking act that goes  

through in the us you lower some of the taxes  a lot of these margins are going to be raised  

or thin and I expect a lot of these companies  to keep posting larger and larger losses so  

that's why I think IIPR Stock and MJ  Stock (MJ Stock) are better opportunities  

but I’m very curious to see what you guys have to  say about weed stocks overall because it is a very  

interesting area it's a way that could make a lot  of money there's also a way that you could lose a  

lot of money and this is not the type of industry  that I want to invest in especially when I’m up  

significantly in 2020 and I’m trying to keep  that going into 2021 and this is just too much  

risk that I’m willing to take on so MJ Stock (MJ  Stock) and IIPR Stock are the only two stocks I  

would consider from this list but let me know what  you thought of my analysis of the weed stocks and  

let me know what you think is the biggest factor  for a bullish or a bearish case about weed so  

thanks for watching I appreciate all  support and I will see you tomorrow