The legalization of cannabis, both for recreational and medical reasons, is now being viewed favorably not just by cannabis enthusiasts but also by the medical community, lawmakers, and entrepreneurs. The cannabis industry is booming and cannabis connoisseurs and businessmen alike are wondering how to invest in marijuana.
The cannabis industry is not just composed of a cannabis store or dispensary. It comprises research and development, sales and distribution, and marketing. When cannabis was legalized in several states and countries, it gained a wider acceptance for both recreational and medical use.
The global cannabis industry is no doubt growing. In 2019, on data gathered by Statista, the worldwide expenditure for marijuana reached about $24 billion and was projected to increase to $63.5 billion by the year 2024. With this amazing economic growth, there is no doubt that cannabis entrepreneurs and even non-cannabis entrepreneurs are very interested in investing in marijuana stocks.
You must be one of those who want to get into the “green revolution” and you want to know how to invest in marijuana stocks. Investing is a huge step and responsibility. Your money and your future are at stake here. You want to invest because you want to earn money. That is why it is best to do a lot of research first before getting into investing your money in marijuana stocks.
Before you start investing in marijuana stocks, you must get to know the product where you plan to invest your money in. Having more knowledge about the product will equip you with the important things that matter, especially if it is your first time investing.
How to Invest in Marijuana?
- Know the different types of marijuana. There are two main types of marijuana products: medical and recreational marijuana.
- Medical: In simpler terms, medical marijuana or cannabis is used in the medical community as a treatment for a variety of medical conditions. It is legal in several states and countries. To be able to use medical cannabis or marijuana, you must secure a doctor’s or a healthcare prescription. It can be consumed in several ways like smoking or ingesting via food or other edible products like capsules or vaping concentrates. This weed can also come in the form of oil, ointment, topical, or lotions. One of the most popular medical compounds of cannabis is Cannabidiol or CBD. Marijuana strains with high CBD content don’t have psychoactive effects. Presently, the Food and Drug Administration has approved three THC-based drugs: Cesamet, Marinol, and Syndros which are used in the treatment of nausea and vomiting caused by chemotherapy. Syndros can also be used in the treatment of AIDS-related anorexia.
- Recreational: These types are legal in 11 states and the District of Columbia for adults of legal age (21 years and above). Recreational cannabis has high THC content which brings about psychedelic effects and a strong mental high. The most common way to consume recreational cannabis is through smoking or vaping. Edibles have also grown popular. Recreational cannabis consumers are after the physical and mental effects of marijuana.
- Get to know the different stocks of Marijuana. As mentioned earlier, the cannabis industry is more than just selling and buying. It is composed of different sectors that make the industry fascinating.
- Knowing how to invest in marijuana is very important if you are interested in joining the hype on the cannabis industry. Do not ever take for granted the political and legal risks as these perhaps are the biggest risks that you have to deal with. Remember that the use of marijuana or cannabis is limited only to states and countries where it is legal. Marijuana-related businesses and transactions have restrictions. The drawback is that cannabis entrepreneurs may have difficulty in getting business loans from banks to raise their capital.
- The law of supply and demand. Since there are only a few dispensaries and marijuana is getting popular, there seems to be a problem with the supply and the demand of the same. Cannabis dispensaries in Canada have taken major expansion initiatives to increase cannabis production. Other cannabis dispensaries are making the same efforts to meet the demands. This only shows that the global demand for marijuana is increasing; thus, the industry is booming.
- Research and evaluate top marijuana stocks ETF. This means that you have to dig into the top marijuana stocks. This will help you decide on where to invest. Do not forget to check the company’s background and market cap. Extensive research will give you an idea of where to entrust your investment. Examples of such companies are Canopy Growth Research, Aurora Cannabis, Cronos Group, Tilray, Green Thumb Industries, Aphria, among others.
- Be wise and be careful. You may now know how to invest in marijuana. Invest wisely and carefully. Investing can be risky, so you may want to start with a small investment in marijuana stocks first. As the cannabis market slowly progresses, check on how your investment does and slowly increase your position if you see positive and promising results.
Conclusion
Investing in marijuana stocks is a big and risky decision. Knowing how to invest in marijuana stocks will equip you with the facts and knowledge that you need before you decide to be part of this booming industry. As we have mentioned earlier, you can start with a small position. It is like testing the waters. See what happens with your initial investment. We all know that the cannabis industry is at its tipping point. If your initial investment looks good, then you can decide to add to your position.
