Why I’m lighting up my portfolio with weed stocks
High hopes, higher returns.
I’ve spent a substantial $1,902.92 on marijuana this year.
That sounds like a lot, right?
But with only eight days left in 2024 and my stash running low, there’s a strong chance my total will increase before the calendar flips. I’m no longer in denial about the many benefits that weed has provided to me and my body. I’ve come to terms with paying good money for a product that improves my quality of life.
The difference this year is that I diligently tracked each of my weed-related expenses. After logging my alcohol purchases two years ago, I realized how insightful monitoring the cost of my hobbies could be.
Would you believe I’ve paid an astonishing $255.96 just on smoking papers this year?
When looking for ways to reduce my weed bill in 2025, I’ll start there.
Fortunately, the cannabis industry is flooded with alternatives to the traditional flower form. There are edibles, vapes, oils and tinctures, concentrates, capsules and more.
Anyone looking to experience the benefits of marijuana can now do so without ever taking a puff. It’s been a game-changer for millions of people, removing both the stench and the long-held stigma of smoking.
With more options, I believe millions more people will come around on marijuana.
That’s why I added two weed stocks to my Roth IRA this month: Tilray Brands and High Tide.
While I’ve done my best to refrain from stock-picking in the past, I realized that my personal investment in the cannabis industry reflects my lifestyle choices. Hims and Hers Health was the first growth stock I added to my retirement portfolio last month. But I’ve spent too much money on weed over the years not to position myself to capitalize on the growth of the marijuana industry.
It’s a decision that carries significant risk.
Marijuana is still illegal under federal law as a Schedule 1 drug, defined as having no accepted medical use and a high potential for abuse.
That’s absurd, of course.
Weed is already widely used to alleviate chronic pain, anxiety, stress and depression, improve sleep quality, promote relaxation, regulate appetite and enhance one’s mood, among other things.
The Justice Department earlier this year submitted a proposal to reschedule marijuana from a Schedule 1 to Schedule 3 drug — a measure that would acknowledge cannabis as having accepted medical uses.
I believe it’s only a matter of time before that proposal is approved and federal legalization follows.
Marijuana is now legal in 39 states and the District of Columbia for medical use and 24 states and the District of Columbia for recreational use. Attitudes have rapidly shifted about marijuana use. The younger generation is much more accepting than its predecessors.
Once federal legalization occurs, I anticipate a more favorable environment for cannabis companies, which could lead to significant increases in stock prices over time. Legalization would boost investor confidence in the industry, paving the way for market expansion and enhanced revenue streams through access to banking services and loans that are currently prohibited.
When that happens, whether it’s five years or 10 years from now, I anticipate my weed stocks will pop.
I started investing now because I believe weed stocks are distressed assets. Many are trading at their 52-week lows, presenting a unique opportunity for those willing to take the risk.
Selecting the right company and getting rewarded with a skyrocketing stock price might be as improbable as hitting the lottery. Nevertheless, much like my stake in Hims, my weed stocks will help me learn how to evaluate businesses.
For my initial lesson, I invested $1,125.70, which bought me 550 shares, split evenly between Tilray (TLRY) and High Tide (HITI).
Tilray became the first cannabis company to trade publicly on a major U.S. stock exchange in July 2018. The company is a leader in the Canadian cannabis industry and recently expanded into the U.S. craft beer market while waiting for the U.S. to legalize marijuana federally.
High Tide prides itself on being the highest-grossing cannabis company in Canada and the second-largest cannabis retailer globally by store count. With nearly 200 Canna Cabana branded stores, High Tide boasts a loyalty program with more than 1.5 million members. High Tide also is a founder-led company, which gives me additional confidence in its management team.
In 2025, I might match my weed spending with my cannabis investments. This way, I can keep my hobby in check while also banking on an emerging industry that has enhanced my life.
Ultimately, investing in cannabis is about turning my passion into profit.
As attitudes shift and legalization starts to smoke out the outdated views, I’m ready to roll with the changes. With thorough research supporting my choices, I feel confident in my strategy.
With a little patience, I’m certain my portfolio will soar to new highs.
Disclaimer: The information contained on Money Talks is not intended as, and should not be understood or construed as, financial advice. I am not an attorney, accountant or financial advisor. These are my personal experiences, and neither this website, newsletter nor podcast is a substitute for advice from a qualified professional.