Is hemp stock worth the investment?

Published Mar 13, 2020 12:00 p.m. ET
iStock / Darren415

The cannabis industry has had some slippery profit margins, especially with the federal law making it difficult to expand their companies across the US. Although cannabis is cost-effective on many levels, the stocks seem to be somewhat elusive, and it has been challenging to keep costs at a functional level. With marijuana still in its infancy stages, hemp is beginning to look like an excellent choice.

The hemp stocks

In December, the federal government passed a farm bill. Since then, hemp stocks have become very lucrative for those looking for a stable investment. It's been a dream for those making CBD products such as pet products, gummies or oil capsules, ad these products are in very high demand as of late. With hemp now legal, it seems a little less risky to produce and distribute these products.

Cannabis is legal in individual states, but not in all of them, and this causes a bit of a kerfuffle when it comes to generating revenue and cutting through the red tape. Hemp is a straightforward crop to grow, so there is less concern about losing profit. The hemp plant grows beautifully outdoors and is very environmentally conscious.

Charlotte’s Web

Concerning hemp stocks, we see a rise for sure, and investors seem to be looking at this as an excellent opportunity to make some cash. Charlotte’s Web is probably a name you have been hearing. They are leading the market of CBD products in the first three quarters of 2018, and they generated 8.7 million in earnings.

The prediction is that Charlotte’s Web is most likely going to remain in the lead. They have 40,000 square feet of manufactured and research facilities and approximately 2,700 retailers that are already carrying their products. Charlotte's Web is cultivating 300 acres of Hemp, making this company a very fruitful stock to invest in.

Canopy Growth


Canopy growth, as of now, is not operating in the US yet, so Canopy is not a big player in the CBD products. However, if you are up for a little bit of risk, then you will see some great potential in the future of Canopy Growth. Canopy is one of the largest cannabis producers, and they have a hemp crop underway right here in Canada. This move will add some competition to the hemp stocks. Canopy Growth has the machines needed to extract CBD from the hemp plant and has recently expanded by purchasing a Colorado-based hemp researcher.

CV Science

This company has surpassed Charlotte's Web regarding the CBD market. They are currently working on smoking cessation that intertwines CBD and nicotine to help eliminate the cravings for tobacco. If that works, it will be sure of a top-rated product. We can expect to see this product on the market very soon.

In the big picture, any stock that you invest in is a risk. Hemp stocks are going to be flourishing as the demand for CBD based products seems to be on the rise. Marijuana stocks are still a bit of a risk as we all know that the stock market is always going up and down.

Hemp stocks can be a great choice for investors, especially now that the farm bill has passed, as that opens up ample opportunity for more companies to grow hemp, which increases competition, leading to a higher potential for profit.

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