Cannabis Investing 101. Every investor is looking for the next “can’t miss” stock when it comes to putting their financial resources to work, but many times that means they have waited too late to really get ahead of the curve. Smart investing takes some research and understanding of what factors can impact how the market and the economy will respond to certain movements. Investors provide companies and corporations the financial resources they need to develop new products, and the companies then are to respond in kind with effective use of those resources in building maximum company returns for investors. Being ahead of the curve is how investors are rewarded beyond typical returns, and choosing the right industry for those returns is vital to solid growth. Cannabis investing is a prime example of those investment opportunities that may be set to explode in the near future when new investors in the niche are properly informed.
How Legal Status Affects Investment Choices
One of the first considerations when investing in cannabis in the United States is the fact that the substance is only totally legal in eleven states with the exception of medical marijuana authorization. While many states have enacted medical marijuana laws that allow potential sales growth, the states that have legalized recreational use could be the best geographical access areas to look for in the short term. California is a prime example. Caliva stock is an attractive option for many who are new to cannabis investing because of their steady upward trend in value. According to the experts at Money Morning, “Joe Montana’s venture capital fund, Liquid 2 Ventures, has a stake in Caliva. The marijuana startup raised $75 million in funding last year. The company offers retail cannabis stores and same-day delivery and is using the funding to expand its operations.” Colorado and Illinois are also lucrative markets, with Illinois having just authorized sale for recreational use.
Understanding Different Industry Facets
Another consideration when investing in cannabis is the number of operations that actually go into the supply pipeline. Some companies are growing companies while others are distribution and sales outlets. Still other companies are distribution operations that house products in wholesale storage for distribution to retail outlets and pharmacies. There are also companies that focus on edibles and other THC products that can be taken in alternate methods that are becoming popular, and this particular segment of the market could well be the most promising regarding investment growth potential.
Global Investment Potential
Although investing in the United States can be geographically driven, the real truth is that marijuana is legal in some other countries, with the most significant to the U.S. being Canada. And Canada is ahead of the game with respect to investment opportunities as well. The fact that they are also in the North American trade zone means it is easy to invest in Canadian stock opportunities with little restrictions, many times resulting in excellent short-term growth while also setting the stage for potential long-term growth power as well. And it is just a matter of time before the United States makes the final decision for legalization in some format.
Investing in cannabis is indeed a very optimistic pattern in the contemporary market. Whether you are new to investment on any level, or if you are a seasoned investor just trying the market because of growth potential, it is still essential to conduct some due diligence research before making a final purchase decision. And even if short-term possibilities appear weak, there is clearly a looming growth trend that will allow for long-run investment growth in the future.