How to invest in Marijuana industry?

[C40]

I think Marijuana will be legal federally within 5 years or so.

Any ideas on how to invest in this industry? I think there will be a huge increase in the amount of pot consumed as many of the folks who smoked in their early 20's and stopped because it was illegal and sometimes a little burdensome to purchase start smoking it again. I wouldn't want to open my own dispensary. I'd rather just invest some (modest) portion of my capital somewhere. But where? Companies that make pipes and vaporizers? Cigarette companies that might start selling pot? Cheetos and YUM Brands?

[jacob]

I'm guessing the usual suspects (tobacco companies) will pick it up. They're pretty diligent already picking up e-cigarettes to compensate for the increasing unpopularity of tobacco, so they'll probably go for weed too.

[RealPerson]

The competition is quite fierce and the cost of growing is quite high. Besides the serious regulation adding to the cost, it is my understanding that the utility cost is huge. The plants apparently need optimal growing conditions to be really profitable. Hence the huge utility cost for lighting, heating and humidifying. The growers and sellers in Colorado are complaining that the business is far tougher to make a profit than they assumed.

That of course is true for Colorado, where pot growing conditions are not ideal. Once it is legal at the federal level, one would imagine that the cost to produce in areas like CA or the Southeast will be much lower.

[Dragline]

Here you go:

http://marijuanastocks.com/

I have never investigated these, but often wondered the same thing myself. You'd have a very interesting portfolio if you diversified into, say, bitcoins, marijuana and for-profit prisons (CXW pays some bad-ass dividends for taking care of the bad-asses).

[jacob]

@Dragline -
http://finance.yahoo.com/q/hl?s=VICEX+Holdings

[Sclass]

Watch out about that stock list.

http://www.bloomberg.com/news/2013-08-2 ... finra.html

One of the only things I recognized in the list was the company who holds phototron, the gimmicky grow box that sold well when I was a college student. No serious grower would use one. They made money by selling to college kids who didn't know better. Looks like scammers.

I looked into this stuff a decade back while working with a client on a greenhouse control/monitoring system. Visit any hydroponics store and you'll see a number of names over and over again. All small businesses owned by mom and pop hippy people selling pumps, hydro media, fertilizer, lamps, charcoal filters and the like. Not public. Small and hyper profitable. Fox farm comes to mind.

I'm not sure how and when it'll ever make the transition to the Phillip Morris and Monsanto realm. That is, real, large scale agriculture. I guess since it hasn't happened yet one has to use imagination to try to predict the future. High efficiency grow lights? Certified organic fertilizer? ECigarette?

[anomie]

Indeed, companies like Philip Morris and British American Tobacco already have the agricultural infrastructure in place, (fields of tobacco which could easily be converted to cannabis), a successful delivery method via cigarettes and well-established distributions channels.


In fact, tobacco retailers are already the default mechanism for the distribution of medical marijuana in some states.

http://www.cnbc.com/id/36177544
(3 year old article; imagine how much more prepared they are now...)

[Chad]

This is going to come so slow and be so obvious all the real opportunities for investors to make money are going to be taken up by people in better position and with better connections. I'm not suggesting we couldn't make money, but that it won't be the gobs we could make if the government made it completely legal tomorrow.

[lilacorchid]

Any Canadian over the age of 19 with no criminal record can now be a pot farmer for supplying prescription meds. (Well, you have to take a course.)

Anyone want to back us?