Few of these marijuana businesses have any kind of track record of success

Their executives have yet to prove they can operate a cannabis business profitably. If they did, they’d probably have rap sheets, since the stuff’s only recently become legal in the states where it is allowed. MedMen, for example, has proven very good at burning through piles of cash. So 2019 should be a good time for investors to determine which of these American weed sellers knows how to actually make a profit.

Watch out for insider stock sales

Except for iAnthus Capital Holdings (IAN.Canada and ITHUF.OTC) and Green Thumb Industries (GTII.Canada and GTBIF.OTC), more than 75% of these companies’ shares remain in the hands of founders and private investors. They’re sitting on big gains and will surely be tempted to unload some of their shares when their IPO stock lockup agreements allow them to. After a lockup expired for Canadian producer Tilray (TLRY) in January, the stock plunged. Curaleaf’s lockup expires in April.

Follow the progress of legalization

Some very big states among the 33 that allow medical marijuana are eager to join the 10 that also allow recreational adult use. The governors of New York, Illinois, and New Jersey want to legalize recreational pot. Each of these reforms will open a new market for the American marijuana producers. But most companies don’t want states to become too open for business—they like states that award only a limited number of retail licenses. In Oregon and Colorado, competition is fierce and pot prices are low. That’s great for a sick patient whose insurance won’t cover cannabis, but pinches profits for marijuana merchants.