Not All Marijuana Stocks are Actually Marijuana Stocks (PHOT, NVLX, CBIS … – SmallCap Network

Though they’ve been lumped into the same category as Medical Marijuana Inc. (OTCMKTS:MJNA) and Tranzbyte Corp. (OTCMKTS:ERBB), names like Nuvilex Inc. (OTCMKTS:NVLX) and Growlife Inc. (OTCBB:PHOT) aren’t actually marijuana stocks. Granted, PHOT and ERBB shareholders will benefit from the advent of legalized marijuana (and hemp) as much as shareholders of ERBB – a grower and dispenser – and MJNA shareholders will. But, in some way they’re safer and more stable because they’re not directly in the line of fire of potential regulation… or better-enforced regulation at the federal level. Indeed, there are several stocks that are circumventing the risk inherent with marijuana stocks, because they’re not marijuana stocks at all. They are, in no particular order….

Hemp, Inc.

It’s important to understand that hemp and marijuana are two different things. Oh, there’s certainly a relationship, and the boundary between the two can get fuzzy at times [broadly speaking, whenever hemp is in focus for industrial/non-high uses, medical and recreational marijuana doesn’t seem to be too far away]. But, hemp is its own category, and its hemp’s industrial applications that Hemp, Inc. (OTCMKTS:HEMP) is working to develop and capitalize on.

Interestingly, did you know that hemp is the strongest plant-based, non-man-made fiber in the world? Not only does it make a very tough rope, it can even be used to make building materials, used to make fabric, and more. Although Hemp Inc. may be the owner of a subsidiary called Marijuana Inc., Medical Marijuana Consulting Company, and, it doesn’t actually sell pot (legal or otherwise). Those subsidiaries and properties simply provide information to the marijuana-using market.

Nuvilex Inc.

If one didn’t know a thing about the company, with just a quick glance at its website, the aforementioned Nuvilex Inc. would look like most other biotechnology stock of its ilk. One has to read closely to see the reason NVLX has been regarded and treated as a marijuana stock…. it’s developing a small family of drugs that uses cannabinoids because of their unique chemical constituents. Specifically, THC and CBD have been proven to have anti-inflammatory, antioxidant, and anti-cancerous properties. Nobody’s using a Nuvilex drug, however, is going to get high from it.

Growlife Inc.

While many states allow individuals to grow their own marijuana for personal, medicinal purposes, that doesn’t mean cannabis plants are easy to grow. Growlife Inc. helps small (and large) growers by providing them the equipment they need to produce the plants… lighting, sensors, and mini-greenhouses, just to name a few of the company’s offerings.

Interestingly, while Growlife Inc. subsidiaries Evergreen Garden Centers – a bricks and mortar retailer specializing in organic and small-scale gardening – certainly has appeal to cannabis growers, its products are something of a hit with organic vegetable and fruit growers too. PHOT could do quite well even if no more states legalized marijuana, for medicinal or for recreational purposes.

Cannabis Science Inc.

Much like Nuvilex, Cannabis Science Inc. (OTCMKTS:CBIS) appears to simply be another conventional biotech outfit. And, truth be told, that’s what CBIS is. It just happens to be developing two drugs based on cannabinoids… one to reat HIV/AIDS, and the other to treat cancer. Both drugs are in preclinical trials right now, so an actual marketable product is still years down the road for Cannabis Science Inc. But, as a legitimate biotechnology that isn’t aiming to simply fuel tokers’ needs, it’s not going to hit any regulatory or law-enforcement roadblocks.

Bottom Line

While the market has treated any and all names with any sort of marijuana basis as if they would all benefit from 2014’s new marijuana-friendly laws in a couple more states, clearly not all these companies are simple pot vendors like Tranzbyte or Medical Marijuana. Indeed, most of the stocks that have been bid up thanks to the new marijuana craze don’t actually sell marijuana for recreational or medicinal purposes. That’s a good and bad thing.

It’s bad in the sense that, bluntly, the lion’s share of the money to be made in the industry is probably going to be generated by the companies that simply let people roll a joint. It’s good in the sense, however, that the ancillary marijuana businesses and related biotechs avoid the legal headache and hassles that inherently come with the marijuana business. Though most marijuana stocks are overbought right now, the four described above – CBIS, NVLX, HEMP, and PHOT – are most likely to be the ones left standing once the industry goes through its first real shakeout, separating the men from the boys.

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