I definitely think the sector has potential.
However, we have to understand here that it's in its infancy.
I am a growth investor, so everything comes with some degree of speculation. As growth investors, we must accurately predict a company's ability to drive future revenue and earnings growth. This is often because we're paying a premium for that company's stock at the current moment, expecting it to be a bargain in the future.
One solid valuation metric to use for unprofitable companies is the price to sales. Price to earnings obviously has no purpose as the company is losing money. So, We want to see how much the company is trading at times revenue (sales).
Right now, Numinus has revenue through 2020 of $610,148. The company has a market cap of $88 million. This is equal to 144 times sales. I'm going to tell you right now, the company will need to put up some crazy, crazy high growth to justify that type of valuation.
A prime example would be a company like Shopify, who has grown its revenue by around a 50% clip very consistently. It hovers between 40-60 time sales. Numinus has almost no history, so the speculation on a company like this is sky high.
It could turn out, it could not. Right now the industry is at the stage where you simply bet on a horse and hope it wins. I typically wait until an industry is much more established prior to entering. Yes, I give up some early growth. But I also reduce the speculation by a large degree.
Don't get me wrong, I think the industry has potential. As to who will be the frontrunner though, who knows. One thing I would suggest, is invest with expendable capital. These stocks, especially when something goes bad, often drop twice as hard as they've gone up.