Key Facts All Beginner Marijuana Investors Should Know
Marijuana is projected by some to be a $75 billion industry by 2030.
This growing commercial enterprise continues to catch the eye of investors everywhere. Some have already cashed in on the success of businesses so far.
Still, there’s a lot to know before jumping on the marijuana bandwagon. Not everyone stands to gain from purchasing pot stocks.
The legalization of cannabis has led many to throw money at this new industry. Read on to discover what new marijuana investors should know in order to invest safely.
Marijuana Industry Boom
The legalization of marijuana has created an influx in businesses across Canada and for those states who have seen the decriminalization of its use. There seems to be a buying frenzy that has some businesses scrambling to meet the demands.
According to many, we can expect to see the industry’s revenue headed up. Which means marijuana investors are taking advantage of this boom in profits.
If you want to join the ranks of marijuana investors, then there are some aspects you should take into consideration before taking the plunge. Just like any investment, there are risks involved in purchasing stocks.
Current State of the Market
As it stands now, investors have yet to see many profits resulting from their contribution to weed producers. These businesses are in a phase of growth so many are using all of their profits to invest back into their companies.
It doesn’t help that legalization and licensing is still in its beginning stages. There’s a lot we still don’t know about the future of marijuana.
Still, there is a wide array of potential growth opportunities for marijuana. Some say the marijuana industry will take business from alcohol and pharmaceutical profits.
Outside of just CBD oil and products, the marijuana industry has already begun to build partnerships. This may extend to large beverage and tobacco companies. With more nations legalizing marijuana, it stands to reason that this industry will expand across the globe.
Marijuana Investors’ Predictions
Some marijuana businesses are already seeking mainstream retailers to sell CBD products. This would increase sales by destigmatizing the use of Cannabis. These prospects for strong earnings and growth are why marijuana investors are jumping in.
Despite the fact that currently, marijuana stocks have poor Earnings Per Share Ratings. Marijuana investors are in it for the long haul. They feel confident that this industry will have a lot to offer as the popularity of these products increases.
Stocks to Invest In
There are three types of marijuana stocks that are worth considering. These are the Canadian, U.S., and hemp stocks. For the past couple of years, Canada was the key player in the marijuana industry. Now that the U.S. is legalizing it in many states, we’re about to see U.S. companies increase profits.
California alone has a larger population than Canada. Which means we should continue to see an upward trend in U.S. marijuana stocks.
You don’t have to just invest in growers of the product. Consider investing in key players of the industry that are not in the forefront. For example, you may be interested in pursuing stocks in vaporizers, supplies, or other smoking accessories. This way your entire investment isn’t in just the growing side of the marijuana industry.
Planet 13 stocks show serious potential when it comes to major growth in the industry.
Research the Product
It’s worth investigating the product of the company you are looking to invest in. The quality of their cannabis strain and product will determine if their business is here to stay. You should also be familiar with the types of marijuana products being solid: medical or recreational.
Medical marijuana is legal in 33 different states. Patients are required to get a prescription from an authorized healthcare provider in order to use medical marijuana. Typically products used for medicinal purposes contain cannabidiol (CBD) and do not have psychoactive effects. This is due to a lack of the chemical ingredient, delta-9 tetrahydrocannabinol (THC).
Recreational marijuana is only legal in nine U.S. states and the District of Columbia. Users of recreational marijuana tend to be interested in both the psychoactive effects of THC as well as the medicinal aspects of CBD.
Unfortunately, when it comes to research, the information isn’t always straight forward. Some of the leading marijuana businesses in company revenue are not the largest in production.
Growing Pains
Since the marijuana industry is on the rise, not everyone is going to be a winner. Marijuana investors are taking note of this and diversifying their investments. There are already companies that are dropping off, regardless of the large potential that the industry offers.
There are also a lot of legal concerns still in question. Making marijuana legal is a brand new endeavor at the global level. There are bound to be growing pains throughout the process. This could mean hiccups along the way that hit companies hard.
For example, Canada’s backlog of marijuana licenses and compliant packaging shortages. Not to mention the high taxes on marijuana in the U.S. that have caused buyers to look elsewhere, including the black market.
Think Long Term Future
While not all marijuana investors are seeing growth instantly, the projection of the industry is what fuels their interest. As with any investment in the stock market, shareholders gain by sitting tight and holding shares to weather the storm.
Don’t devote more money to your stocks than you are willing to lose. The volatility of these stocks is what makes them so desirable. When you stand to gain huge profits, there’s also high risk involved.
When buying or selling pot stocks, make sure you are using the limit orders. This is especially true on the over-the-counter (OTC) exchange. You can better avoid the volume-based liquidity that comes with the volatility of OTC.
Once you’ve made your investments, be prepared to sit on them for years. This isn’t something you are going to see instant results from.
Ready to Join Other Marijuana Investors?
Before companies’ shares are more dilutive, considering marijuana investments now is a strategic move. We continue to see an increase in popularity and revenue from the marijuana industry and growth in the number of marijuana investors. Many experts foresee an unprecedented growth in the next decade.
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