As marijuana legalization begins to slowly roll out state by state, it follows that marijuana-based businesses have cropped up, and many are trying their hand in the public markets. It is difficult to maintain an objective view of an investment that is so politically charged sometimes, but we cannot dismiss an entire sector out of hand. So, let’s have a look at what marijuana stocks might be worth considering.

Marijuana Stocks to Consider

First up is General Cannabis Corp. (OTCBB:CANN), a company that is staying away from growing and selling, which is where the risk is, and focusing on services. It also trades at about $10 per share.

CANN acquires and leases cultivation space and facilities to licensed marijuana growers and dispensary owners. It also provides security services and cash transport to licensed cannabis cultivators and retail shops. It offers consulting services to the cannabis industry that comprise of obtaining licenses, compliance, cultivation, retail operations, logistical support, facility design and construction services. Additionally, it provides direct term loans and revolving lines of credit to businesses involved in the cultivation and sale of cannabis and related products.

CANN is to marijuana stocks what the people who made the real money in the gold rush were: the folks who sold the picks and shovels. Regrettably, CANN is losing more and more money on marijuana services every year and is also burning cash. Like the pick-and-shovel sellers of yore, there is a lot of competition in the marijuana servicing space. I don’t see how one can justify paying 90 times revenue for a marijuana company like this.

Axim Biotechnologies, Inc. (OTCBB:AXIM) is a different beast in marijuana stocks. It takes a biotech angle on cannabis, claiming to work on “the treatment of pain, spasticity, anxiety and other medical disorders with the application of cannabinoids based products as well as focusing on research, development and production of pharmaceutical, nutraceutical, oral health and cosmetic products as well as procurement of genetically and nano-controlled active ingredients.”

Per its last 10-K report, the company is conducting clinical trials at two universities in the Netherlands and one in Canada, addressing patients with MS, bowel syndromes including Crohn’s, and those suffering from “illicit drug-related psychosis.” Another proof-of-concept clinical trial in the Netherlands focuses on patients with psoriasis.

Look, I’m skeptical about all this. Obviously, pain relief would be a great thing to achieve, but the other stuff… I don’t know. That these are all taking place abroad also doesn’t fill with me with hope. A $514 million market cap on pure speculation is too rich for my blood in the world of marijuana stocks.

I suppose INSYS Therapeutics, Inc. (NASDAQ:INSY) is something worth looking at as far as marijuana stocks go, mostly because it has a real cannabis product. INSY does have one other product out there, which is a fentanyl sublingual spray that is delivering real revenue. The cannabis product is Syndros (dronabinol), which is used for pain management for a number of procedures and has been approved by the FDA.

While I am not crazy about what I see with Axim, Insys seems to be on to something. Alas, company management is embroiled in a North Carolina bribery case, alleging kickbacks were paid to doctors to prescribe the fentanyl product and allegations of off-label marketing.

INSY is also potentially on the hook for millions of dollars in lawsuits over the money spent on the product’s possible illegal marketing scheme. Ugh.

Still, INSY put up a $150 million litigation reserve and, if it can get moving with its products, this might be the one stock to keep an eye on.

Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance and is the Manager of The Liberty Portfolio at www.thelibertyportfolio.com. He does not own any stock mentioned. He has 23 years’ experience in the stock market, and has written more than 1,800 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.