We now have more information about marijuana than ever, but there are still a bunch of myths that influence the way in which we view the herb.

There are a lot of myths surrounding marijuana, ranging from crazy stuff to others that makes a little bit of sense. This confusion is understandable; it’s only recently that marijuana has earned some legal status across states, and that serious scientific studies are being conducted.

Although much of marijuana’s make up and effect remain mysterious, there’s lots of room to learn more. We scoured the web to find some of the most popular marijuana myths. Here are six of the most common.

Weed isn’t as strong as it used to be

According to Ryan Vandrey, a professor from John Hopkins University, THC in cannabis is way higher than it used to be. Since cannabis is now a business, there are expert botanists that breed plants that contain larger quantities of THC. So maybe people smoked more weed in the 70s, but that doesn’t make today’s marijuana any less potent.

All weed is the same

There are two major types of marijuana, Indica and Sativa, both of which produce different highs. In short, Sativas are psychoactive while Indicas are more relaxing. It’s a little more complicated than that, since most marijuana plants contain a mix of both, but this generally works as a rule of thumb.

Synthetic marijuana is safe

Synthetic marijuana is much stronger than regular marijuana and it can lead to some really awful side effects. Synthetic marijuana has chemicals added in in order to resemble the effect and look of natural marijuana. These chemicals are harmful for your body, with some of the most serious side effects include renal damage, psychosis, cardiovascular harm and changes in the brain.

You can overdose on marijuana

It’s extremely unlikely to die from a marijuana overdose, but if you smoke too much you can have a pretty awful time. These overdoses can last a couple of hours and include symptoms of anxiety, paranoia, dizziness, and loss of coordination.

You can cheat a urine test

While there are tons of products that claim to do this, it’s very, very unlikely and practically impossible to cheat a urine test if there’s marijuana in your system. THC can be detected in urine for up to 10 days after consumption, 30 days if you’re a chronic user. Most products that claim to cheat urine tests simply dilute your urine, which tests can pick up on, flagging your sample as invalid.

Holland has never legalized marijuana

Holland, one of the world’s most popular marijuana scenes, has never actually legalized marijuana. In 1978, the government decided not to enforce bans in coffee shops and locales where people get together and smoke/sell small amounts of marijuana. Still, growing, distributing and importing marijuana within the country remains illegal.

Advertised on the shingle hanging above the merchant’s door is a representation of the wares offered within. The butcher and the baker and the haberdasher alike all make their presences known in this way; why should anything be different for the purveyor of herbal wellness remedies? Because marijuana, that’s why!

CBD Kratom is a particularly successful chain of 27 stores in three states that sell, as the name suggests, among other things, CBD and kratom. Kratom is the plant with sedative and other psychotropic effects that the U.S. Food and Drug Administration believes has killed at least 44 people; it has never been banned. CBD is a cannabinoid found in the cannabis sativa plant — the history of which is full of bans.

Added now to that history is CBD Kratom’s sign: a relatively straightforward affair, the words “CBD KRATOM” in a sort of sleek futuristic-type font, adorned with an unmistakable green leaf with seven long, spindly fan leaves. It’s a pot leaf, it’s a weed leaf, it’s a cannabis leaf. What it’s not, at least not according to the FDA, is a marijuana leaf, as long as the plant represented therein has 0.3% or less THC, the legal line dividing Farm Bill-approved hemp from Controlled Substances Act-prohibited marijuana in the United States.

None of this should matter much in 2019 and certainly not in Chicago, a city in the state of Illinois, where recreational cannabis was legalized earlier this year and where recreational marijuana shops will soon open for business. CBD Kratom isn’t that, but CBD Kratom has nonetheless been prohibited by its landlord from hanging its sign outside its new downtown Chicago Loop location, as the St. Louis Post Dispatch reported. The store has since filed suit against its landlord, alleging breach of contract.

According to the suit, filed by St. Louis-based MNG 2005, the organization’s new landlords prevented CBD Kratom from hanging its preferred sign after making “references to the signage as promoting marijuana usage.”

Separate, but related, is a move by Chicago Mayor Lori Lightfoot to ban recreational marijuana stores from popular well-trod areas in Chicago, including the downtown Loop and nearby Navy Pier, in an attempt to keep the tourist traps “family-friendly.”

As anyone who has tramped around the hucksters’ den that is a major city’s tourist destination knows, there are plenty of unscrupulous merchants with whom you would not trust your junk mail, let alone a member of your family. So while that reasoning may not make sense, what makes even less sense is agreeing to rent to a place called CBD Kratom, which has a cannabis leaf in its logo, and then telling CBD Kratom it can’t use its sign.

According to the suit, CBD Kratom was told that it could not use its sign shortly before the store opened two weeks ago — six months after the store signed its lease, and roughly around the same time Chicago was doing what almost every city does in the marijuana legalization era by figuring out ways to make retail marijuana sales slightly less legal.

The landlord also made statements to the effect that CBD Kratom was “engaged in illicit activities, specifically the promotion and sale of marijuana and marijuana-related products,” according to the suit.

While a property owner is free to make decisions with regard to whom they allow to lease their space, it seems a little hard to believe that CBD Kratom’s landlord didn’t know what CBD Kratom did and what they looked like while doing it. And so now everybody gets to look at each other in court. This is America’s perverse fascination with the cannabis leaf, a symbol with great and terrible power as well as some benefit. As to when the benefit of being able to sell the plant in peace will arrive, well, who can say?

The first European deal for Canadian firm MediPharm Labs will see its medical cannabis products made available to 20,000 German pharmacies.

With dual listings on the Ontario and Frankfurt stock exchanges, MediPharm says this new deal is an important milestone in its global ambitions.

And, it follows hot on the heels of its first ever international agreement in the Australian market, earlier this year. In a stock market statement MediPharm highlights why it has targeted Germany as its first European port of call.

Up To 50,000 Cannabis Patients

It says the German medical cannabis market currently serves up to 50,000 patients; a very rapid advance since its introduction in March 2017. With a population of over 80 million it is set to be Europe’s largest medical cannabis. 

MediPharm’s ‘white label’ agreement with German pharmacy ADREXpharma will see its supply ‘high quality, purity assured, cannabis concentrate derivative products, including THC and CBD oil, for sale and distribution under the ADREXpharma brand’, it says in the market release. 

ADREXpharma is licensed wholesale distributor of controlled drugs and medical cannabis, saying it serves almost all of Germany’s 20,000 pharmacies. 

MediPharm; ‘The Ideal Partner’

Mario Eimuth, Chief Executive Officer, at ADREXpharma, said MediPharm shares its ‘patient-centric focus’ and is its ‘ideal partner’. Founded in 2015, MediPharm specializes in the production of purified, pharmaceutical-grade cannabis oil and concentrates, utilizing Good Manufacturing Practices and hosting ISO standard clean rooms. 

It has five primary extraction lines with an annual capacity of 300,000 kg of  dried cannabis with complementary wholesale and white labelling capabilities. MediPharm is set to shortly complete construction of a new extraction facility in Wonthaggi, Victoria, which will feature supercritical carbon dioxide extraction, it says in a second market release.

This will  be able to process up to 75,000 kg of dried cannabis annually, as well as incorporating secondary processing equipment for the manufacture of purified and high-concentrate cannabis distillate. 

It has agreed terms, initially for one year, with an Australian Licensed Producer to source dried flower for the facility.

As of 2018, legal cannabis was a nearly $11 billion industry, at least according to sales figures published by Arcview Market Research and BDS Analytics in their annual State of the Legal Cannabis Markets report. But according to Wall Street, it could be a $50 billion, $75 billion, or even $200 billion worldwide industry in a decade. This is what makes owning marijuana stocks so exciting.

But as is often the case, the best long-term investments aren't the companies with the largest market caps. Rather, it's the potentially undiscovered gems in the marijuana industry that are small caps or hovering well below Wall Street's radar that are liable to deliver the strongest long-term gains.

Using the most basic fundamental metric of all, the forward price-to-earnings (P/E) ratio, I screened for the cheapest pot stocks currently trading for less than $5 a share. Ultimately, five emerged as having a lower forward P/E ratio than the broad-based S&P 500, despite a considerably faster long-term growth rate.

 

Valens GroWorks: Forward P/E ratio of 8.7

Don't be fooled by its $2.21 share price. Valens GroWorks (OTC:VGWCF) intends to be a big-time player in the extraction-services industry. And at less than nine times forward earnings per share, it's the cheapest cannabis stock trading for less than $5 per share (and perhaps throughout the entire industry, regardless of share price).

What makes the extraction-services industry so intriguing is the fact that Canada is set to launch derivative products by mid-December. Derivatives being nondried flower product, such as edibles, vapes, infused beverages, topicals, and concentrates. All of these derivatives require processing from cannabis and/or hemp biomass, which is where Valens GroWorks comes into play. It's becoming the go-to middleman for pot growers desperate to bolster their margins.

For its part, Valens GroWorks has snagged two deals of significance. It landed an 80,000 kilo-in-aggregate processing deal with HEXO in April that'll span two years, and recently expanded its existing agreement with Tilray to include 125,000 kilos-in-aggregate of annual processing. With the company expected to push its annual processing capacity to 1 million kilos, it'll soon have a mountain of predictable cash flow headed its way.

 

Supreme Cannabis Company: Forward P/E of 9.2

The only other pot stock under $5 a share that has a single-digit forward P/E ratio is The Supreme Cannabis Company (OTC:SPRWF). Despite a microscopic share price, Supreme Cannabis is valued at a mere nine times Wall Street's consensus forward EPS.

The beauty of Supreme Cannabis is the company's unique approach to growing weed. Rather than focusing on quantity, which is what most of its peers are doing, Supreme Cannabis has chosen to focus entirely on quality. The company's 7Acres grow campus is projecting at least 50,000 kilos of annual output per year, but it'll be of the premium and ultra-premium variety. There's virtually no competition for top-tier quality cannabis, which should result in strong pricing power and healthy margins for dried flower and derivative products.

Furthermore, Supreme Cannabis is one of the four pot stocks that was chosen by PAX Labs to be a concentrate supplier of the Era vaping device. With vaping expected to be the leading sales generator among derivative products, and PAX being a top-3 name among vape device companies, this works out as a big win for Supreme Cannabis.

 

MediPharm Labs: Forward P/E of 15

Did I mention that extraction-service providers are important? Though Valens may be a bit cheaper on a forward basis, MediPharm Labs (OTC:MEDIF) also looks to return incredible value at 15 times next year's EPS, according to Wall Street's consensus.

Compared to its peers, MediPharm should have less in the way of peak processing capacity at 500,000 kilos per year. However, after beginning extraction and white label operations in November, the company already managed to turn a profit during the second quarter. That's how valuable these 18-month to three-year extraction contracts are to these service companies. They're providing highly predictable cash flow in an industry with very few guarantees.

Though it's signed a number of deals with major growers, MediPharm Labs' standout extraction contract thus far is with Cronos Group. MediPharm aims to supply Cronos with concentrates over a period of 18 months in a deal worth $30 million, although Cronos has the option of extending the deal to 24 months, which would double its value to $60 million.

 

Planet 13 Holdings: Forward P/E of 15

Vertically integrated multistate operator Planet 13 Holdings (OTC:PLNHF) in the U.S. is another small-cap pot stock under $5 that you're going to want to know. While its minuscule share price will likely scare some folks off, the company's forward P/E ratio of 15 will bring fundamentally focused investors right back.

What makes Planet 13 special is how it's been able to stand out in a very crowded dispensary space. Namely, it's operating the largest marijuana retail store in the world -- a 112,000-square-foot store just west of the Las Vegas Strip in Nevada. This SuperStore has seen its average daily foot traffic more than double since it opened in November, with the average ticket per paying customer rising by more than $11, through August. An unparalleled selection, compounded with immersion stations and self-pay kiosks, has made the SuperStore a must-see for cannabis enthusiasts.

Planet 13 aims to replicate the success of its Las Vegas location in Santa Ana, California, which is just 10 minutes from Disneyland. The company will open a 40,000-square-foot store in the Golden State next year. Given that Planet 13 will be operating in the top-selling pot market in the U.S. (California), and the state projected to lead in per-capita spending by 2024 (Nevada), it's a good bet to be profitable.

 

CV Sciences: Forward P/E of 15.2

Last, but not least, hemp-derived cannabidiol (CBD) company CV Sciences (OTC:CVSI) looks relatively inexpensive at a mere 15.2 times Wall Street's consensus per-share profit for next year.

Even though marijuana hasn't been legalized at the federal level in the U.S., the signing of the Farm Bill in Dec. 2018 did give the green light to industrial hemp production and hemp-derived CBD. CBD being the cannabinoid that doesn't get users high and is best known for its perceived medical benefits. According to the Brightfield Group, CBD sales in the U.S. could average a growth rate in excess of 100% per year through 2023, making CBD a massive opportunity.

CV Sciences' biggest win to date was a June-announced distribution deal for its CBD topicals with Kroger. The national grocer and CV Sciences have since expanded their partnership to include 1,350 Kroger-family stores in 22 states. More importantly, CV Sciences has seen its retail door count more than double in 2019.