Cellular Goods, Kanabo, and MGC: should I buy these cannabis stocks?

first_img Our 6 ‘Best Buys Now’ Shares In the past month, three cannabis stocks that provide both medication and wellness solutions, have debuted at the UK stock market. I think this in itself can be a good indication that the legal cannabis industry is growing. Investor interest in the initial public offerings (IPOs) confirmed this further.Cannabis industry growth potentialAccording to cannabis intelligence provider, Prohibition Partners, the UK’s legal cannabis market will grow from US$190,000 in 2019 to as much as US$3bn by 2024, following  its legalisation in late-2018. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Going by this alone, it looks like a good idea to at least get to know these stocks. Cellular Goods: wellness focusFounded in 2018, Cellular Goods, the most recent one to IPO, has quickly acquired a market capitalisation of £53m. The company focuses purely on the wellness market, developing products like a skin mask and serum as well as a roll-on athletic recovery gel. These are manufactured using synthetic cannabidiol or CBD, a chemical compound found in the cannabis plant. I think its future is unknown though. It is pre-revenue at present, and investor interest is already waning in the stock. Its share price has more than halved from its listing highs.Kanabo Group: wellness and medical marijuanaKanabo Group is also pre-revenue, though its story is somewhat different. The Israel-based company has been around for five years, developing both wellness and medical treatments. Its one unique product is a metered vaporiser to ensure accurate dosage of cannabis treatments. It has run pilots of its products in key markets like the UK and Germany, with some evidence of success as seen in its growing revenues from 2017–19. It did run into the Covid-19 stumbling block in 2020 though.Kanabo hopes to expand into the EU now. MGC Pharmaceuticals: pure-play medicineMGC Pharmaceuticals was the first of the three to get listed. Unlike the other two, however, it is an AIM stock. It focuses purely on cannabis-based medical treatments, especially for epilepsy. It has made some business headway, evident in the fact that it reported sales of $456,000 during the December 2020 quarter. This is a 67% increase over the quarter before. It functions in geographies like the UK, Australia, and Brazil, but is loss-making at present. Big risks ahead for cannabis stocksA loss-making company to me is typically a red flag, with the exception of high-growth markets. That said, there are big risks to consider here. Cannabis is still a nascent market, and future research could show that its harmful effects outweigh the positive ones. This has been the case with vapes. This puts the industry’s future in jeopardy.Also, societal attitudes towards cannabis are still evolving. So these products may not see the kind of reception that is forecast. In other words, the market can fail to develop, which will impact the sector’s and these companies’ growth.  The takeaway for cannabis stocksI am a believer in the potential value of this industry. But at this stage it is risky. I am watching these stocks, though.  Image source: Getty Images I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. See all posts by Manika Premsinghcenter_img Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity…You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy.And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline.Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report.But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Enter Your Email Address Simply click below to discover how you can take advantage of this. Manika Premsingh | Monday, 8th March, 2021 Cellular Goods, Kanabo, and MGC: should I buy these cannabis stocks? The high-calibre small-cap stock flying under the City’s radarlast_img read more