Before you start investing in cannabis, there are things you should know. Read our guide to marijuana investment opportunties to learn if it’s right for you.
When stock market gurus say, “Buy low, sell high,” they mean a different kind of high: The legal cannabis industry is projected to reach $57 billion in spending by 2027.
And you could invest on the way up. Marijuana investment opportunities have exploded onto the stock market scene, and are only increasing in number and value.
If you want to learn how to invest in marijuana, we’ve got you covered. This guide will show you which types of cannabis stocks to watch. The grass is only greener if you get in on the ground floor, so make sure to invest early and wisely.
Marijuana Investment Opportunities
First things first, let’s survey the landscape of marijuana investment opportunities before drilling down and getting specific:
Cannabis Growers
These investment opportunities will present themselves as farms, labs, or other agricultural companies. Growing marijuana legally is often a mix of cutting-edge science and farming.
Cannabis Retailers
Legal pot shops have been popping up all over the United States, and have exploded in places like Colorado and California. A majority of states have some type of legal cannabis, whether it’s medical or recreational. Pot shops are a great way to invest locally, but multi-state and even multi-national corporations are getting into the game.
Pharma and Biotech
Growers and retailers made up much of the early industry, but times have changed. Marijuana-based cancer treatments and other drug types are being developed at a quick clip. Private equity investments have helped some of these companies thrive.
Biotech and pharm investors with subject area expertise will likely excel in profiting from marijuana investment opportunities. Keeping up with pharmaceutical companies on stock exchanges could have you rolling in cash.
Hemp & Other Uses
It’s not just the THC in cannabis that people are after. Cannabinoids of all types can be medically helpful. But the plant itself is also a potential economic boon.
Hemp is one of the strongest materials known to man. Rope, textiles, and other uses make industrialized hemp a huge potential market. While it’s not as sexy as marijuana investment opportunities, don’t discount it.
As with any stock, beware: This budding industry is volatile. You may experience lots of maddening ups and downs.
Knowledge is power. You might want to seek out an investment professional for guidance.
The Markets Market
Companies like Namaste Technologies can also prove to be some of the best cannabis stocks. These corporations focus on the online selling of medical marijuana and other e-commerce needs.
Namaste Technologies operates more than 30 sites, including CannMart, and works in 20 countries. That’s the kind of growth and reach that’s sustainable long-term.
Join a Group
One of the best pieces of advice we can give you is to check out what others in the industry are doing, especially the big guys. Join e-mail lists, discussion boards, and Slack channels. Find other online resources, or join an offline group.
If you are new to investing, listen more than you speak. Even if you think you know everything about cannabis, you can always learn from veteran investors.
Because 420 heads (or more!) are better than one, it’s useful to stay involved with professional industry groups. The National Institute for Cannabis Investors is a great organization with resources geared to all levels of investors. Their advisory board full is of big names, such as The Green Dutchman and John Vardaman of The Cole Report.
It’s important to put yourself out there. Try joining up with investor groups both online and offline. If you are teachable and interested, you will easily make friends.
Canadian Cannabis Stocks
If you really want to know how to invest in marijuana, it’s important not to discount Canadian pot stocks. In fact, they could end up being more profitable than American marijuana investment opportunities. Just this year our northern neighbor legalized cannabis nationwide.
Larger marijuana firms such as Canopy Growth, Aurora Cannabis, the Cronos Group, and Tilray have seen astronomical price and value jumps since Canada’s legalization. Investopedia calls Canopy Growth and Aurora Cannabis the two top marijuana stocks of 2018 for investors in Canadian markets.
Be careful investing in Canadian stocks, however. Make sure you’ve done your homework and know how to get in and get out on your schedule. The Canadian stock market is often called OTC (over-the-counter), and can involve “penny stocks.”
The Securities and Exchange Commission doesn’t regulate these stocks the same way that trusted American IPOs are policed, and sometimes investing can be highly speculative.
Watch for Innovation
One investment strategy that works across the board is knowing what’s new. Keeping track of innovative initiatives by cannabis corporations will give you a sense of where money will flow in the future.
For example, creative companies like beer-maker Constellation Brands are throwing down huge sums of money to explore cannabis-infused beverages. And CBD oil is now added to some vape juice for e-cigarette smokers. Companies like CIIX (Chineseinvestors.com, Inc. – a company based of out Los Angeles) are making big moves with cannabis-based products used for therapeutic and sometimes medicinal purposes.
It can pay to know what’s blazing in stores, as you could see it light up the market!
Start Small
Never invest more than you can afford to lose. Even the best cannabis stocks still have to contend with a federal ban on the drug. Make sure your portfolio is diversified and you are not putting all your buds in one bowl.
Only put your money and time into qualified brokers, or work with a financial advisor. You don’t want your investments to go up in smoke!
Are Cannabis Stocks for You?
According to Seeking Alpha, there are more than 200 different marijuana investment opportunities in the current market. Thousands more are no doubt on the horizon in the coming years.
With rapid legalization and changing social norms, will see the marijuana industry bloom as time goes on. It could pay dividends (literally!) to invest on the ground floor in some of the best cannabis stocks.
Is your investing future still hazy? Regardless of your choices about pot stocks, check out our tips on how to prepare for your financial future.