Scotts Miracle-Gro Might Have the Best Marijuana Strategy
Legal marijuana is expected to be a huge growth business, with some projecting a market opportunity of as much as $166 billion. That's many years away, since the industry is still largely in its infancy. But the projection shows just how excited Wall Street is about legal weed.
The problem is that investors have a bad habit of getting too excited in the early days, pushing story stocks up to unrealistic heights. The recent declines in marijuana growers suggests that's happened again. Here's why Scotts Miracle-Gro (NYSE: SMG) didn't get hit, and why it may be a better option for long-term investors interested in the space.
When you buy a marijuana grower like Canopy Growth, you are making a direct bet on the future of legal pot. It is a notable player in the space, but its future won't be nearly as bright as hoped if legalization doesn't continue to spread across the United States. Its entire future is basically tied to more people taking advantage of the legal opportunity to use marijuana. That's not bad or different from any of the other pot stocks; it's an issue they all face as they compete for market share.
Source Fool.com
