A big drawback of investing in cannabis is that, right now, it's a risky industry to be putting your money into. Many businesses aren't profitable, and fund their growth through equity, or share, offerings, diluting current investors in the process. As a result, their stock prices have been crashing. In just the past year, the Horizons Marijuana Life Sciences ETF has declined by more than 50%. Although the S&P 500 has struggled, it's down a more modest 16% over that time frame.
There is significant upside for pot stocks in the long run, but it can be difficult, if not impossible, to predict which cannabis companies will stick around given the industry's current struggles. A safer option for investors is to target large companies that have exposure to the cannabis industry.
One stock cannabis investors should keep a watch out for is convenience store giant Alimentation Couche-Tard (TSX: ATD) (OTC: ANCT.F) . The Quebec-based business operates in 24 countries and territories around the globe and it has more than 14,000 stores, with many falling under its flagship Circle K banner, a key rival to 7-Eleven. The company has generated $68 billion in revenue over the trailing 12 months and posts consistent profits.
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Want to Invest in Cannabis With Minimized Risk? Buy This Growth Stock.