Many investors are interested in cannabis stocks and the opportunities emerging from the legalization of marijuana in Canada and dozens of U.S. states. This has become a big trend in investing and finance that has been amplified by the parabolic rise and fall of hot marijuana stocks like Cronos Group (CRON) and Tilray (TLRY). These companies—once penny stocks—became worth tens of billions of dollars (on paper) overnight, before going back down again. That’s what happens in investing manias. We saw this with cryptocurrency as bitcoin and other tokens soared to breathtaking heights and grabbed our readers’ attention.

Some were interested in learning about what bitcoin and other cryptocurrencies were all about. Others were more interested in the blockchain and its potential to disrupt industries. But most people were fascinated with the wild price swings in cryptocurrencies and were learning how to trade it and spot opportunities to make money. Most of those readers were younger—aged 18 to 24—and lived primarily in the northeast, Florida, California, and Oregon.

We thought we’d see a similar pattern with marijuana investing. We were right about what interested them in marijuana stocks but were very wrong about who was interested in the topic—way wrong.

Investing Chops

Who is reading the most on the topic? We saw that our more-sophisticated trading and investing audience would potentially have the highest level of interest in pot stocks. Looking at the math, those who follow technical analysis in our Chart Advisor channel were the most interested, followed by our exchange-traded fund (ETF) readers and cryptocurrency enthusiasts.

This made intuitive sense to us. Given the relative youth of publicly-traded marijuana companies, they don’t have long financial track records that allow investors to analyze their fundamentals. Most of them have paltry sales figures and almost none of them are profitable. Looking at their price-to-earnings or price-to-growth metrics is almost futile since many of them lack both.

Charting share price movements on a daily, hourly, or minute-by-minute basis, however, is possible. But it's downright dizzying. On Sept. 19, 2018—the day Tilray eclipsed $28 billion in market capitalization for a few hours—trading volume hit 30 million shares. That's three times the stock’s daily average, according to Nasdaq. It was halted five times for trading due to the extensive order flow. There are only 21 million outstanding Tilray shares in the first place!

Foreign exchange enthusiasts—those who trade currencies—also use technical analysis in their trading strategies. These traders typically move in and out of positions rather quickly, just like day traders. Curiously, though, there was scant overlap between these readers and those who are interested in marijuana stocks. This may be explained by the fact that forex trading requires a particular discipline, focus, and knowledge of global markets which isn't necessary for trading pot stocks.

Risk Appetite

The previous section does give us a look into the mindset of our readers and what kind of investing strategies they are likely to adopt. It's safe to say that those with a higher risk appetite, a day trading mindset, and a more aggressive investing strategy were more likely to be interested in marijuana content on average.

Readers interested in bonds, retirements, annuities, and asset classes typically favored by those with a long-term, risk-averse, and cautious outlook were likely to avoid such content. That paints a mental picture of the interest skewed towards a younger audience and away from the older readers. But hold onto that thought….

Age Distribution

Almost 57% of all the interest in marijuana content comes from readers over 35 years of age. If we assume that the people who are into marijuana are the people that are into marijuana stocks, this is surprising. (But few people under 24 are into investing of any kind...)

To truly understand the age distribution of marijuana interest outside of investing, we examined the reader analytics on our sister sites at Dotdash such as TheSpruce.com, TheBalance.com, and health and wellness site VeryWell.com, to capture reader interest by age. Our assumptions were way off.

Interest in pot stocks skewed much older than we thought it would:

• 18 to 24-year-olds are 35% less likely than average to be interested
• 45 to 60-year-olds are 25 to 30% more likely to be interested
• Males outweigh females in marijuana stock interest: 79.7% versus the Investopedia average of 64.8%

Younger investors are typically associated with riskier and aggressive investments while older investors are considered to prefer safer and more stable investments. The marijuana industry is still young and marijuana stocks are nascent investment plays which is why the distribution skewing towards older readers was unexpected.

Some Things Surprised Us, Others Didn't

The crypto enthusiast interest is the least surprising group to us. We saw a similar spike in traffic with them when bitcoin topped $20,000 for a few minutes. However, the age difference between the crypto enthusiasts and the cannabis stock readers is notable. TD Ameritrade released a study back in September 2018, according to Bloomberg, which showed that both crypto and cannabis trading was predominantly done by millennial men who day-trade. Our data tells us that the cannabis reader is much older.

When you look at the intense swings that marijuana stocks make on a daily or even hourly basis, it stands to reason that technical analysts who follow price movements are the most attuned to the dynamic trading activity in this speculative group. The ETF crowd is a little surprising, however. Yes, several marijuana ETFs were launched in 2018. Horizons Marijuana Life Sciences Index ETF (HMMJ)—the Canadian-based marijuana ETF—surpassed $1 billion in assets in July 2018. But by and large, ETF enthusiasts tend to have a longer time horizon than day traders—at least on our site.

Our assumption of marijuana content interest fading over time since legalization was thrown out of the window by trends in Alaska and Colorado. While the waning excitement of readers in states with newly legalized recreational pot, such as California, Maine, and Massachusetts, also laid that theory to waste.

The Bottom Line

The mainstream market for marijuana stocks is still in its infancy, despite the number of public companies in the U.S. and the Canadian companies that are traded over-the-counter (OTC). Marijuana still remains illegal at the federal level in the U.S., and the federally regulated banking system forbids marijuana companies from using it. But this market is far from mainstream and that is also reflected in the small demographic of people who trade marijuana stocks. Investors who do are mostly trading on technical price moves that may be driven by a news snippet or rumor, but not based on fundamental analysis. Volatility is extreme, valuations are exorbitant, and gains can vanish in a wisp of smoke.

It is not surprising that active traders eagerly consume our marijuana content in a bid to get in and out to make a quick buck in the short-term. But the startling age distribution of those who read marijuana-related content interest has us wondering if the cautious retail investor is educating themselves while waiting in the wings for the industry to really take shape before they join the party.