Editors Note: This is a guest post.
Cannabis as an investment
The cannabis industry experienced exponential growth between 2014-2018, becoming a billion-dollar industry. During that time span, plenty of cannabis companies went public in Canada, as well as the major US exchanges like NYSE and NASDAQ. They’ve managed to attract significant funding from investors, which means there was a broad audience believing in the potential of the industry.
Increased media attention and investors’ enthusiasm pushed cannabis stocks higher, but things started to settle during 2019 and 2020, when a temporary loss of confidence occurred, mainly due to reduced profitability, as is expected with any new industry.
Since cannabis stocks were so volatile on the upside and the downside, trading CFDs on these assets had become a popular activity, considering that multi-asset brokerages such as TRADE.com are now covering all the top cannabis-related stocks.
Now that the initial enthusiasm had settled, rampant growth switched to the backseat and investors are focusing on the fundamentals, looking after profitability and positive balance sheets. If most of the cannabis-related companies experienced high profits and big losses afterward, some emerged as leading names, managing to generate confidence among investors.
Top 3 Cannabis stocks
Cronos Group Inc (NASDAQ: CGC) is an innovative global cannabinoid company, with international production and distribution across five continents. Committed to building disruptive intellectual property by advancing cannabis research, technology, and product development, the company has a passion for customer experience. Listed on the NASDAQ, its stock is currently valued at $7.34, trading in positive territory for 2020, after several ups and downs throughout the year.
A Canadian licensed cannabis producer and listed on the Toronto Stock Exchange, Aurora Cannabis Inc (NASDAQ: ACB) is a company with eight licensed production facilities, five sales licenses, and operations in 25 different countries. With a funded capacity of 625,000 kilograms of cannabis production per year, it is currently among the largest companies in the industry. The ACB stock is trading for 9.39 CAD, down on the year, but posting increased volatility.
Aside from the companies fully focused on the cannabis industry, there are plenty of large players interested in the field. One of them is AbbVie (NASDAQ: ABBV), also known as Abbott Labs. Currently the 9th largest pharmaceutical company in the world by revenue, it has filed for more than 50 cannabis-related patents in the USA, more than any other company, according to a report published in 2019. Currently valued above $100, the AbbVie stock benefits from increased investor attention.
Considering all these companies are publicly listed, there are plenty of different trading instruments available for retail traders, including CFDs. The TRADE.com CFDs on cannabis stocks offer is one of the most trusted, due to the solid reputation of the trading brand.
With many large companies investing in cannabis-related research and product development, the industry still has growth potential. Retail traders and investors can take advantage of both rising and falling markets thanks to trading instruments such as CFDs, providing tight trading costs and optimal liquidity. As cannabis-related therapeutics are embraced globally and regulation is put into place, investors can join the industry without having to worry about compliance.
CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.9% % of retail investor accounts lose money when trading CFDs and spread bets with this provider. You should consider whether you understand how CFDs and spread bets work and whether you can afford to take the high risk of losing your money.