The 420 Investor Breaks Down The Marijuana Sector


Alan Brochstein, also known as the 420 Investor, joined Benzinga's PreMarket Prep to discuss some of the top marijuana stocks.

The Popular Play

When it comes to one of the most popular marijuana plays on the market, GW Pharmaceuticals PLC-ADR GWPH, Brochstein says the stock will likely continue to trade sideways until the company submits its New Drug Application (NDA) for epidiolex. The NDA submission has already been delayed several times and is now expected to happen in mid-2017.

“The good thing for investors is this company is doing everything it can to make sure that that NDA doesn’t have any sort of deficiencies that would lead to any delays, so I’m excited about the company’s long-term prospects,” he explained.

Related Link: 2 New Ways To Invest In Marijuana Stocks: Cannabis ETFs

Miracle Gro

When Benzinga asked about indirect marijuana play Scotts Miracle-Gro Co SMG, Brochstein pointed out that its cannabis assets, which it plans to spin-off in the future, only represent about 10 percent of total sales.

“I don’t think you can invest in this company for that. If you like this company, it’s something to keep in mind. But the stock’s going to move on a lot of other things before it moves on cannabis,” he said.


Not A Pot Stock?

Brochstein noted that, while he understands why marijuana investors are interested in Zynerba Pharmaceuticals Inc ZYNE’s cannabinoid treatments, it's only loosely related to marijuana.

Brochstein points out that companies like Zynerba, which is working on synthetic ZBD, aren't friendly to the organic marijuana business. If synthetic cannabinoid drugs win out, Brochstein says organic growers could get left behind.

"I follow [Zynerba], but I don't really maintain an opinion on it... I think investors like to play on this marijuana theme—they think it’s helpful. I can see why people are interested in Zynerba, but Cara Therapeutics—nothing to do with cannabis."


Brochstein also mentioned Canopy Growth Corp WEED, which he noted is a client of his, has been under some pressure recently. Despite that, it has maintained the largest market share of any marijuana stock.

"It kind of goes in and out of favor, I would say, as investors liking it the most and the least," Brochstein said, citing the company's multiple platform and modes of production as reasons to like the company.

Listen to the full discussion at the 15:50 mark in the clip below.

PreMarket Prep is a daily trading ideas show that focuses on technical analysis and actionable short term trades. You can listen to the show live every morning from 8-9 a.m. ET here, or catch the podcast here.

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