I felt compelled to write about this topic because it seems like every advertisement I see lately has something to do with Marijuana stocks and how you can get rich quick if you buy them. Let me shed some light on this for you.  If it sounds too good to be true it usually is and in this case the same holds true.  Don’t get me wrong.  I do believe there is some opportunity to invest in this area of the market, but most of these advertisements are touting penny stocks.  Most of these are a scam and do not pan out.  I am not saying you cannot make money on a penny stock, because it is possible but very unlikely and extremely risky.  Most of these penny stocks have no viable company behind them, so unless you are playing with money you can afford to lose stay far away.  With that being said, there are ways to benefit financially from the Marijuana industry and its potential growth.

I have no doubt that there will be some good companies which will benefit from the legalization of marijuana, whether recreational or medicinal. My advice as always would be to do some research before committing any money to a stock you found out about through an advertisement.  Look for real companies that have established earnings before investing.  I have found a few companies that would be worth a second look.

One company that stood out to me has a long history of established earnings and growth potential would be The Scott’s Miracle Grow Company, symbol SMG. I am sure many of you reading this have used their products to fertilize your yard or various plants.  However, you probably didn’t know that this company was becoming a player in Hydroponics.  Hydroponics is a method of growing plants without soil, using mineral nutrients in a water solvent.  This is a very effective and popular method used in the growing of Marijuana.

Please don’t take this article as a recommendation to go out and buy stock in this company. I am merely trying to make a point that it is necessary to do the proper research before making any investment. There are too many sponsored advertisements out there that will lure you into an investment that is probably not suitable or most likely some type of scam.  An advertisement promising you that if you invest you will be rich is a warning sign to stay away.

At Fogel Capital, we research investments daily and do not make rash decisions to buy based on the hot stock of the day. There are many factors to consider before purchasing any security and thorough research needs to be done in order to make an investment decision.  As always, the opinions in this article are that of the authors and should not be considered investment advice.  Everyone has a unique financial situation and you should always consult a qualified Financial Advisor before making investment decisions.  If you have any questions on this article feel free to call Jay Chapman, CFP® at Fogel Capital Management, 772-266-3431.