Unfortunately, most pure-play marijuana stocks are unproven, and they trade on high-risk, unregulated over-the-counter stock markets. Recently, marijuana vending machine company Medbox and its founder settled SEC allegations of improperly inflating the company’s revenue in press releases. That settlement is an important reminder that marijuana stocks can be incredibly risky. Instead of focusing on small, pure-play marijuana stocks, a better idea might be to focus on bigger companies that also benefit from Americans’ improving attitude toward cannabis. For example, GW Pharmaceuticals plc (NASDAQ: GWPH) has been researching marijuana as medicine since the 1990s, and last year, it demonstrated that its Epidiolex, a purified formulation of a non-psychoactive chemical found in cannabis, can reduce seizures in uncommon forms of epilepsy. Patients experienced about 40% fewer seizures when taking GW Pharmaceuticals’ Epidiolex in trials, and that’s got management targeting a filing for FDA approval of the drug this year. If the FDA gives Epidiolex a green light, then doctors throughout the United States should be able to prescribe it to patients next year. Investors might also want to take a closer look atScotts Medical marijuana stocks Miracle-Gro(NYSE: SMG). The gardening and herbicide company has spent hundreds of millions of dollars buying companies that sell hydroponics equipment and supplies, and management believes marijuana legalization could be a significant driver of its future sales growth. General Hydroponics, Gavita, Botanicare, and AeroGrow are among the companies they’ve either acquired outright or bought big stakes in. 10 stocks we like better than Scotts Miracle-Gro When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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