Village Farms Intl Inc (VFF)

[TheMonolith]

Brody thinks that the best marijuana stocks to buy don't just have a good business plan – frankly, solid business plans are a dime a dozen. What matters is executing on those plans, and that requires both a great management team and experienced partners that can bring value to the company.

"A lot of people come to this industry as doctors or farmers; quite a lot come from business backgrounds," Brody says.

If you've gone gung-ho into marijuana stocks and own shares of a company that grows cannabis and puts ingredients into topical creams, for example, you may be in deep trouble if the entire business is run by MBAs. Doctors and farmers – either as partners or company managers – need to be hands-on stakeholders in a business like that.

The second thing every cannabis investor should know before buying marijuana stocks is the company's long-term plan. Specifically, their long-term pricing plans.

"One of the most important things is – and I can't stress this enough – is are they focused on becoming a low-cost producer?" Brody says.

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Marijuana is still in the nascent stages of its market adoption in Canada, and as it stands, demand far outstrips supply. Eventually the market will correct itself and marijuana's primary use will be as an ingredient in other consumer packaged goods (CPGs).

"Marijuana's no different from any other CPG industry. The two factors that lead any CPG industry are high-quality and low cost. So unless businesses are planning right now to be low-cost producers, to plan ahead for price compression, they're going to get left behind," Brody says.

Over time, factors like price compression, quality and branding will determine who gets left behind and who charges ahead to industry domination. And despite Canada's fast-tracked 2018 acceptance of the cannabis industry (or perhaps because of it), investors are about to witness a multi-year Darwinian bloodbath as each company aggressively competes to gain lasting market share.

https://money.usnews.com/investing/investing-101/articles/2017-09-20/best-marijuana-stocks-to-buy-wont-exist-until-2020