Investing in marijuana industry still extremely speculative

With four states having legalized marijuana and more considering it, investors might be thinking pot is the next big thing. But marijuana remains illegal at the federal level, so Wall Street and big business are taking a hands off approach to the potential cash crop.
The website MarijuanaStocks.com lists 38 cannabis-related stocks. Nearly all of them are penny stocks, which are prone to market manipulation and bankruptcy. Three tickers on its list of Marijuana Stock Quotes are trading at less than a penny a share.
Marijuana Business Daily offers a list of 11 marijuana stocks. Same story: a bunch of crappy penny stocks that no one should touch with a 10-foot pole.
These sorry lists of public companies with ties to the cannabis trade don’t inspire much confidence in the industry.
Mark A.R. Kleiman, a professor of public policy at the University of California at Los Angeles, told Bloomberg that he’s skeptical about prospects for the recreational marijuana industry.
“I just don’t see how there’s money to be made producing an agricultural commodity,” he said. “Once this is a competitive market, prices will be driven down to the level of costs. Costs for cannabis are very small, if it’s produced legally.”
One “real” company connected with the marijuana business is GW Pharmaceuticals. It develops cannaboids for the treatment of cancer pain, multiple sclerosis spasticity and epilepsy. (See article at Investors.com.) It has a real business with a differentiated product offering.
You can’t say the same for the other guys.