While they are down from the multi-year highs set earlier in this year, cannabis stocks remain in the rally mode. Failure to do due diligence is the most obvious mistake an investor can make, but, having followed the sector now for over five years, I think there are several others that are worth discussing, which extend beyond just the cannabis sector. This strategy is risky in general but especially in the cannabis sector, which consists of a lot of companies without much operating experience. Most cannabis stocks are not generating positive cash flow, and many of them rely on convertible notes to fund their operations. As I indicated earlier, there just aren't that many cannabis stocks that merit investment at this time, in my view, so building a portfolio with 50 stocks would by necessity force one to include a bunch of stinkers.

Source: Forbes May 06, 2018 15:22 UTC