Want to Invest In Marijuana Stocks? Here are The Fatal Mistakes to Avoid


Stock investors donít have limits. They can invest in virtually any sectoróincluding the hot marijuana industry. With marijuana stock, you have a sphere that is skyrocketing; thanks to the hot demand of these products out there. 2019 has been a good year for marijuana investors. A good number of US-based marijuana sticks have recorded up to 30 percent rise in terms of the share price.  With these stocks, you can cash in quickly. However, mistakes can be fatal. They can push you into the desperation zone and leave you devastated. So, the best thing to do is to do your research, employ discipline, and be observant. Also, you need to invest in the best pot stocks. Above all, you should try to avoid the following mistakes when investing your money in marijuana in stocks.


When investing in the stock market, the power of research cannot be underestimated. With research, you have a tool that will give you all the information needed to trade with confidence. Plus, if you donít do extensive research, you risk losing your moneyósomething traders are keen to avoid. Read news releases. Donít rely on comments from prominent marijuana investors. Remember, marijuana companies tend to hire fake investors to pump up the price and give a positive feeling about the company stocks. Any company has a public relation team that tries to make it look profitable and promising. So, relying on such information can be misleading. Rely on verified info. Go to well-established sites and dig your information there.

Donít Rely On Online Information

The US Marijuana mart is booming. Many companies are being established. Plus, the stock market is skyrocketing. This has given birth to numerous Wall Street-based analysis  on the marijuana stocks. With these analyses, many stock traders have been deceived to invest huge chunks of money without carrying our due diligence. Donít fall into this trap. Never trust Wall Street analysis. They have been carried out by someone like you. Plus, these analyses are out to make money. So, they will include even fake analysis just to capture your attention. So, trust research. Analyze news from reliable sources like Google News.


Marijuana laws can be daunting. Of course, some states have made strides as far as the legalization of marijuana is concerned. However, the laws governing this substance are extremely strict. So, if a company doesnít follow these rules, it can be disastrous. The laws are strict and can lead to the closure of that company. Thus, before investing your money in the marijuana industry, itís better to understand all the regulations. With this approach, you can spot companies that are flouting the rules and avoid their stocks at all costs. Look for a company that has competent legal staff. This is a good sign that that company takes marijuana regulations seriously. Itís also important to check whether the company has been permitted to do business. Look at the companyís certification. Who gave it the mandate to conduct the business? Is the company operating in the right jurisdiction? Is the company compliant when it comes to marijuana laws? These are some of the questions you should ask before investing your money in marijuana stocks.


When it comes to stock investment, nothing takes center stage quite like diversification. For instance, stocks in big companies like GW Pharmaceutical and Company Growth Corp can be tempting. You will be lured into allocating more portfolio onto these stocks. However, there is a risk. When the portfolio is concentrated, the risks become more. Thus, you should rebalance your portfolio by selling those stocks that have been performing nicely throughout the year. Remember, cannabis stocks can be extremely volatile. Plus, the risks abound. So, donít be tempted to concentrate your portfolioóespecially when it comes to investing in newly created cannabis companies. It can be fatal. Diversify your investment. Donít invest in one or two companies. Look for more companies. That way, you are sure that your risks are diversified.

Donít Focus on High-Risk Stocks

Naturally, investors will want to pick stocks featuring the most potential upsides. Itís important to note that the market is likely to expandóbringing numerous companies on board. Plus, these smaller companies will have an almost equal say on the market. Thus, they might even be more profitable than their established counterparts. However, investing in these companies carries a lot of risks. Remember, this is an extremely volatile market. Anything can happen.

Donít Sell Too Early

Donít sell too early. A company can lose its share value and gain immensely in a few hours. This shouldnít lead to selling your stock and quite the game. Wait. Observe the market. Act naturally. Donít be in a rush to make profits and leave. You might miss a huge profits in the next few minutes or hours.

Future Legalization

Donít leave illusion dominate. Believing that the US government will legalize marijuana soon is an allusion and can be disastrousóespecially when it comes to investing your money in marijuana stocks. Itís important to note that the US representatives have many other priorities. So, they are not likely to prioritize the legalization of marijuana. Plus, many of these representatives have a conservative approach when it comes to marijuana. Thatís why you shouldnít look forward to the full legalization of marijuana. Plus, the pharmaceutical drug lobby is not going to give in to the marijuana pressure. They will fight tooth and nail to see it remain an illegal substance in the US.

The Bottom-Line

Invest in Marijuana stocks in style. Donít make costly mistakes. Plus, investing in marijuana can be volatile. It comes with lots of risks. The only way to make things work is by embracing discipline, doing your research, and having the right tactics. Plus, you need to avoid the above mistakes if you want to have any chance when investing in marijuana stocks.