How Does Warren Buffett View Cannabis Companies?

Buffett sees companies as businesses and not just tickers. Buffett avoids businesses that he doesn’t understand.

Mohit Oberoi, CFA - Author

Mar. 7 2019, Published 11:22 a.m. ET


Cannabis companies

So far in this series, we have discussed Berkshire Hathaway (BRK-B) chairman Warren Buffett’s views on macro aspects like the Fed and US-China trade talks. We have also analyzed Buffett’s views on some of the portfolio companies like Apple and Kraft Heinz. In this part, we’ll analyze Buffett’s views on the cannabis industry.

In a CNBC interview, Buffet was asked, “Do you think the hemp and marijuana industry is a viable industry to invest in, even though there are still restraints on how capital can be moved and used?” Buffett said, “it’s an industry that I don’t know, really, anything about, usage or otherwise.” Buffett said, “I couldn’t even smoke a cigarette. I mean, you’re talking to a guy that doesn’t pick up things very fast.”

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Warren Buffett

Buffett sees companies as businesses and not just tickers. Buffett avoids businesses that he doesn’t understand. Some observers have also blamed Buffett for not investing in tech companies. Buffett admitted that he doesn’t understand tech companies as much. Over the last few years, Buffett has invested in and exited tech names (SPY) like IBM and Oracle.

Cannabis stocks (HMMJ) like Aurora Cannabis (ACB), Tilray (TLRY), Canopy Growth (WEED), Cronos Group (CRON), and Charlotte’s Web Holdings (CWBHF) have attracted a lot of investor attention.

Buffett has negative views on cryptocurrencies like bitcoin. Read Could Warren Buffett’s Views on Bitcoins Change? to learn more.


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