Bigger players aren’t shunning marijuana-related stocks as the whole. For example, GW Pharmaceuticals, a biotech developing a cannabinoid for the treatment of epilepsy ,sports a market value worth billions, and the vast majority of its shares are currently held by institutions. Image source: Getty Images. At the end of 2016, institutions owned just 0.04% of Medical Marijuana Inc.’s outstanding shares. You should never blindly follow other investors, but taking a little time to understand their actions is usually worth the effort. Read on to see why this stock is being shunned before making up your own mind. Not in the majors The fact that Medical Marijuana Inc. is a penny stock traded over-the-counter might be the biggest reason banks haven’t shown much interest. Plenty of companies list their shares on the OTC markets for perfectly legitimate reasons, but the exchange’s relative lawlessness as compared to the NYSE and NASDAQ exchanges makes it a haven for fraudsters. One convenience the company enjoys is the ability to maintain a stock price below $1.00 for extended periods, which would lead to delisting from a major exchange. Although issuing new shares is a Green Rush perfectly acceptable way to raise capital, doing so nearly always lowers stock prices.
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