Kevin O’Leary, star of ABC’s Shark Tank and chairman of O’Shares ETFs, is steering clear of investing in marijuana and cannabis stocks.
On a segment of Yahoo Finance this week, O’Leary said there were several reasons he wouldn’t be investing in cannabis.
“As an institutional investor I don’t touch this space and I don’t because it’s a Schedule 1 Narcotic – even cocaine isn’t a Schedule 1 narcotic,” O’Leary said. “But marijuana and CBDs are. So as an issuer of securities, someone who plays the markets institutionally, I don’t even have an option to look at this. I’m not an investor nor are 99% of institutional investors, so this is very much a retail phenomenon.”
Looking at the industry long-term, O’Leary said cannabis is “a total commodity no different than tobacco or vodka or anything else like that.”
“Over time, the low cost providers that have disruptive scale will own this market and margins will be no better than the tobacco industry,” he said. “So somewhere along the line there’s going to be a pretty brutal correction – I don’t know when or how that’s going to happen.”
He added he’s also not interested in investing in a controversial product that Mothers Against Drunk Driving doesn’t want to see in the hands of teenagers.
“I have no interest in that,” he said.
Watch the full Kevin O’Leary segment on cannabis here:
For more trending videos, visit our video category.