As more and more states begin to legalize marijuana while its medicinal benefits are being more widely used, the cannabis industry has become a hotbed of investment opportunities. Here are four things that you need to know if you are considering investing in the cannabis industry.
Understanding the Cannabis Market: Although the possession of marijuana is not legal on a national level, it has been legalized for medicinal use in more than 30 states. Because it was legalized at the federal level in December 2018, the use of the cannabis plant has taken off. The cannabis plant produces both hemp and marijuana. In addition, both marijuana and hemp also contain cannabidiol (CBD). As the market for CBD continues to explode, investing in this industry has become more widespread as savvy investors look to capitalize on its growth.
Different Cannabis Stocks: There are different types of cannabis stocks to consider putting your money toward. The first type of stocks is the direct marijuana growers. Biotechnology companies with a focus on cannabis also fall under this umbrella. CBD oil stocks are also poised to make a big rise as more people turn to this supplement for a myriad of medicinal and recreational uses. Lastly, be sure to consider the various providers of ancillary products that serve the cannabis industry.
Benefits of Investing in Cannabis: While some investors see investing in this industry as risky, the upside is that there is a high reward potential to put your money toward this booming sector of the economy. As more states jump on board to legalize marijuana, the stigma associated with cannabis will continue to decline. This embracing will work to propel the industry forward and open up new avenues of monetizing its growth. The industry is known for its diversification, with uses ranging from recreational to medicinal and beyond. It is important to understand that investing in the cannabis industry is a long-term commitment. You will yield the most significant returns if you are prepared to watch your money grow along with the trajectory of the industry as a whole.
How the Coronavirus is Affecting the Cannabis Market: It is no secret that the ongoing global coronavirus crisis stretches across numerous industries. Thus far, states that have ordered shelter in place proclamations have also designated the cannabis shops as essential businesses. Depending on the city, there may be stricter rules in place that dictate how cannabis is to be purchased. For example, in San Francisco, the shops are required to provide curbside pickup in an effort to adhere to the social distancing rules. Despite these restrictions, many cannabis retail shops are reporting a booming business as people are ordered to hunker down at home to ride out this health crisis.
However, because the cannabis industry is new on the scene, not all businesses will have the cash reserves necessary to recover from a major economic downturn. In addition, because cannabis is still illegal at the federal level, these industries will not qualify for bailout assistance. While this may present challenges to the individual businesses within this industry, investors may find good bargains once the dust settles.
Boasting a huge upside, it is worth your time sting in this growing market in an effort to grow your wealth and support this nto consider inveew industry.