Are pot stocks worth the investment or will you just be sending you money up in smoke?

(Like what I did there?)

I’ve been thinking about them for a while now.

While I don’t think I’d recommend them as somewhere you’d want to put your entire retirement fund, my interest in them continues to grow as more states slowly move towards legalizing pot.

When I invest in things I have a two part method that rarely even gets past the first part.

Part I – actually have a clue what I’m investing in. 

I’m not talking all the numbers like Earnings Per Share, dividends or P/E (which has nothing to do with gym class). I mean, what the heck are these people selling?

The majority of my investments are target date or index funds, which are compilations of several things intended to balance the risk while still providing a good return.

But once a year I also try to buy an individual stock.

Warning: This is kind of the stupidest way to buy stocks. Yes, I realize that. Maybe it’s the gambler in me that likes individual stocks – to be fair though, the ones I’ve bought are pretty well established. 

….except this mad pot scheme I’m currently on. But we’ll get more to that later.

Anyway, the last stock I purchased, you may have heard of: Coca-Cola.

I understand Coca-Cola. My dentist has gotten a lot of business due to my 27-ish years as a Coca-Cola customer. There are days when I literally crave Cherry Coke.

You might think that this health kick craze America has been on should put a damper on my Coke enthusiasm, but it doesn’t. Coke is cheap and a major staple among the (growing) lower middle and lower class. And let’s not even get into how worldwide Coke it.

When I invested in Coca-Cola, I knew what I was buying. And after I was confident about that, I checked out all the numbers related to the stock and decided that then was as good a time as any to buy (also, I am not a stock market timer at all, but if a stock is super overpriced, I’m probably going to buy something else at that time).

The other stock I own is for a company called Hillenbrand, Inc, which is one of the largest mortuary services in America. The vast majority of funeral homes are owned by Hillenbrand. They sell most of the caskets and right after I bought them, they expanded to crematoriums as well.

Death happens, folks. I’m not concerned that this business is going to tank.

So back to pot.

I think pot is probably here to stay. The question for me has been – is the legalization here to stay too? And with Colorado, Washington, Alaska, Oregon and Washington, D.C. (of all places) leading the way, I suspect most other states will soon follow.

To me, the companies that sell pot are just like a liquor store. And if there are going to be nationwide chains of them, I wouldn’t mind getting in on that now. I have no issues about pot – personally, I hate the stuff, but I don’t care at all if other people are using it. Stoned people are way safer than drunk ones.

Why hesitate then?

Well, based off my initial research, it’s difficult to find legitimate pot stocks. There is no Anheuser-Busch of marijuana yet. If I had to guess, plenty of little pot companies will go bankrupt and a few will rise to the top, but since it’s so early in the game, who is to say which will be which.

And again, that’s just legitimate companies – trying to make a (now) honest living.

There are tons of crack pot (get it?!?) stocks out there with companies falsifying their information or not properly complying with the laws that get suspended by the SEC all the time. Some of those companies couldn’t care less about product and just hopped on the stock market band wagon, knowing that anything related to cannabis lately will have a lot of people willing to throw money at it.

However, part of why my interest in the subject is renewed is that the pot frenzy has died down quite a bit. Stocks like Advanced Cannabis Solutions (CANN) boomed up to nearly $65 a share a year ago and are now down to $5. Honestly, for a company just starting out, $5 seems like where it should be to me.

Anyway, I’m not quite ready to commence with Part II yet, but not ready to rule it out either.

How do you guys feel about sin stocks? Would any of you invest in cannabis companies?

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And now for something entirely different – Femme Frugality, a good blogging friend of mine is celebrating 4 years of blogging this week – 4 years, folks! That is a crazy amount of work. She’s always posting great content about how to live a frugal but fulfilling life and often posts some incredibly thought provoking pieces like Buddhism and Finances, The Business Care for Providing Paid Maternity Leave, and Ragnarok and the Fate of the Planet.

She’s even been crazy enough to let me guest post on her blog once about Health Care Sharing Ministries.

So in celebration of her 4 years of blogging, she’s hosting a giveaway for a $75 Target gift card. You can enter her giveaway here, but stop by her blog and show her some love. You won’t regret it.

 a Rafflecopter giveaway