In recent months, there has been a huge amount of focus on marijuana penny stocks. This is because a large number of them have multiplied in price at various times. The reason for these massive fluctuations/rises in price are due mostly to investors believing that there will be the possibility of marijuana companies succeeding as more states legalize various marijuana-related products, as well marijuana for medicinal and recreational use.
Many states are being encouraged to legalize the substance based on a large number of people’s views, with many states planning to incorporate it as a ballot option in the future.
At present, somewhere between 65 and 75 million Americans reside in states with legal marijuana of some sort. Out with the USA, Canada’s nationwide legalization of marijuana on October 17th should be considered.
With a major accelerator such as the ever-spreading legalizations of marijuana, the substance’s penny stocks have the potential to bloom and flourish into much more respectable figures.
However, as with any penny stocks, they typically have little or no profits as well as minimal operations. They usually trade on pink sheets or over-the-counter bulletin boards, and are therefore not required to file with the Securities and Exchange Commissions. The stocks have low cash value, and are often extremely volatile. As well as these factors, penny stocks are known to trade infrequently, meaning it could be more difficulty to sell any marijuana penny stocks after purchasing.
Risks in the industry itself: The marijuana industry is volatile, and its assets are often tricky to convert to cash. There is also a considerable amount of uncertainty regarding what could happen with the federal enforcement of U.S. marijuana laws, meaning that some may even think that investors and traders would be mad to enter into not only penny stocks, but penny stocks whose security rely on the marijuana industry itself.
If you are going to invest: Given the marijuana industry, the retrieval of a proven track record of a company can be difficult. Before you invest, you should ensure that the company has a growing revenue, a respectable structure with proven management teams, increasing market share, good financial ratios, and whether or not they are overvalued. Asking oneself these questions is particularly important when looking at marijuana penny stocks, since accessing information that is usually easy to do so can be considerably more difficult.
In summary, a lot of people are of the belief that marijuana is growing in usage, and that in time the locations in which it is legalised will increase considerably; generating the popular assumption that any company that has even the smallest affiliation with the product will increase in value. Marijuana penny stocks can be viewed in two different lights – they could be worth it if you do the homework and invest in the correct company as with any stock, and they also may not be worthwhile. As with any other penny stocks, marijuana penny stocks are sold by companies that are often on track for major financial difficulty, and the same precautions as with purchasing penny stocks in any other sector should be taken.
If you want more advice and help on trading marijuana penny stocks, or in case this article has just peaked your interest and you want to read more, then check out this Marijuana Penny Stocks Guide.