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The 5-Minute Guide on How to Invest in Marijuana Stocks

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Cannabis has reached the point that it is very nearly a $10 billion business. For those looking to cash in on such an opportunity, one only need look to a stock exchange and make an investment. While there are only a handful of companies involved in the marijuana industry available on the market, they could be a very profitable investment, especially if the market becomes legal nationwide in the US.

The Cannabis Industry Stock Market Today

It comes as no surprise that the main cannabis stock industry is located in Canada, who legalized medical marijuana nationwide back in 2001. With the government having set a date of 10/18 for  legalizing the recreational use of cannabis nationwide, the industry is poised to boom.

In terms of market capitalization, the largest of these companies is Canopy Growth, who reported a $17 million-dollar quarterly revenue. They’ve attracted a partner with deep pockets: Constellation Brands, i.e. (Corona) which just recently bought  a 10% share .

Coming in behind Canopy Growth are suppliers Aphria, Aurora Cannabis, and MedReleaf all licensed producers, all publically owned.  Although they have all seen top-line growth in recent months, profitability has been a bit spotty.

Biotech firms are also growing rapidly, developing treatments that utilize the cannabinoids that are found in the cannabis plant. UK-based GW Pharmaceuticals has an anti-spasmodic called Sativex on its shelves that is proving promising in the treatment of epilepsy.

The Breakdown

There are more things to invest in the cannabis industry than just the plant itself, such as pharmaceuticals and research, grow operations, consumer products, and more. While pharmaceuticals may have the most potential for net worth and growth, consumer products like vape mods shouldn’t be ignored. Here’s a breakdown of the potential worth of each sector:

  • Pharmaceuticals and Research: $1.5 billion
  • Producer/Grower: $645 million
  • Consumer Products: $302 million
  • Real Estate: $216 million
  • Consulting: $170 million
  • Technology: $162 million
  • Industrials: $54 million

As you can see, the third largest sector financially is consumer products. This would encompass everything from glass bowls and wrapping papers for joints to portable wax vape pens, dry herb vaporizers and desktop vaporizers.

Another consideration in the game of cannabis stocks is investing in companies that help in the growing and cultivation of marijuana. Scotts Miracle-Gro gets a nod for its long-standing tradition of helping plants grow and being a veteran in the lawn and garden industry. Their fertilizers are often used to help grow cannabis.

Trade on the NYSE or NASDAQ

Although one company dealing in cannabis has recently begun trading on the New York Stock Exchange, it is important to consider one important thing before investing in any cannabis stocks. That consideration is the fact that cannabis is still illegal on a federal level in the United States. For this reason, investing in cannabis or cannabis-related stocks on either the NYSE or the NASDAQ carries a much higher risk than other investments.

Where Is the Cannabis Stock Market Going?

With Canada poised to enact nationwide recreational legality for cannabis, and more and more U.S. states going the same way, the potential for growth in the cannabis stock market is high. However, nationwide legalization in the United States may still be far off. Investments in such a market might be highly volatile.

However, as more international stocks look to begin trading on both the NASDAQ and the NYSE, the opportunities for investment will only increase. From biotech firms to companies making wax pens and dry herb vaporizers, there is an almost limitless choice in what to invest in on the cannabis market.

 

This Blog was written for us by Essence Cannabis Dispensary.  You can find more information on them at  

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