Marijuana Stocks a Risky Investment for Novice Investors, According to Report

The ongoing debate regarding marijuana legalization, especially after the passing of legislation in states like Colorado, has raised questions about the financial benefits of investing in marijuana stocks. Go Banking Rates investigates current over-the-counter marijuana stock to evaluate whether it’s a smart investment move and uncovers a stock option ideal for risk-takers.

EL SEGUNDO, CA, December 26, 2012 – Keen investors look to up-and-coming investments that have the potential to offer significant profits, and since states like Colorado and Washington have legalized the use of marijuana, the latest on investors’ radars is marijuana stock. investigates the profitability of existing marijuana stocks to determine whether this stock option is a financially advantageous investment move.

Presently, marijuana stocks are not listed on the three major stock exchanges (i.e. NYSE, AMEX, NASDAQ), however, a majority of marijuana stocks are traded over-the-counter (OTC).

Beth McKenna, Investing Columnist for Go Banking Rates and lead reporter in the investigation explains, “This isn’t unusual for very small companies, though it can pose increased risks for investors, as listing requirements are not as stringent as they are on the major exchanges.”

The report uncovers three marijuana stocks that are actively traded over-the-counter.

UK-based GW Pharmaceuticals (GWPRF) is listed on a sub-market of the London Stock Exchange. The company specializes in producing and selling cannabinoid prescription pharmaceutical products as medical marijuana treatments; its consumer market is in Canada, the U.K., Germany, Spain and Denmark.

Its profit margin is 12.5% and Return-on-Equity is 12.8%. While the numbers don’t hold up to numbers of more dominant pharmaceutical companies, McKenna says it’s “not bad for a smaller less-established one.”

Findings in the investigation also produce data on two other over-the-counter marijuana stock options, Medbox (OTC: MDBX) and Terra Tech Corp. (OTC: TRTC).

Based on the data in the report, investing in marijuana stocks still leaves profitability in the near future unclear, but one point McKenna emphasizes is investors’ exposure to financial uncertainty when opting for this investment.

Click here for the full report.

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