The cannabis industry is currently one of the most booming industries worldwide. There are only a few states that have legalized recreational marijuana use and there are still many more states that have yet to jump on the bandwagon. The opportunity available for investors to benefit from this emerging market is huge and there are many different ways that people can invest in the cannabis industry including stocks, private equity funds, and even real estate properties. It is important to note, however, that before you invest your money, you understand the risks involved in this type of investment. For those interested in investing in the cannabis market, here is what you need to know.
The cannabis industry has been growing at a fast pace
In recent years, the negative stigma surrounding cannabis has slowly begun shedding and people are starting to embrace this plant both recreationally and medically. With more and more states legalizing cannabis, there has been a lot of innovation in the industry which has grown the market and attracted many users as well as people wanting to open up businesses because of the growing demand for cannabis. Take for example all the head shops, both physical and online, such as Grasscity, that have established roots and have become quite successful. The cannabis market is estimated to be worth a staggering $146.4 billion which demonstrates just how popular and powerful this market is. This market comprises many aspects including products, dispensaries, and even services such as delivery, apps, and websites.
Cannabis is an emerging market with potential for growth
There are a lot of exciting opportunities in the cannabis industry for investors, entrepreneurs, and employees. With more and more businesses opening in the cannabis industry, naturally more jobs are being created and this strengthens the economy. In 2020 alone, nearly 80 00 jobs were created which is more than double the amount of jobs created in 2019. These numbers show that this industry is continuously growing with no signs of stopping. This has overall great economic benefits for the country and with more money going into the economy, more research can be funded on the benefits of cannabis, especially medically which is undoubtedly the main focus at the moment.
As an investor, there are different types of investment opportunities including direct investment into a business or you can invest in publicly traded stocks. CBD seems to be the golden child in the cannabis industry at the moment with most of the research and interest focusing on the healing benefits of this compound. It is safe to say that any future developments in the cannabis industry will be focused on CBD and medical marijuana.
The risks involved
More than 70% of Americans are in favor of legalizing cannabis which is an indication that this industry is a good one to invest in. Furthermore, Europe is also on the radar of many investors because it is one of the largest cannabis markets in the world and the European Union ruled that products containing CBD are no longer listed as narcotics. Mexico is also another country that many investors are interested in because it could potentially become the third country worldwide to legalize cannabis for recreational use. This is all great opportunity for investors and it shows that the opportunity stretches across the borders. However, there are some risks involved in cannabis investment including the fact that there is no guarantee of success despite the massive growth because many cannabis businesses open with their eyes on the future success and promise of the industry rather than the guarantee of profits right now. Some early medical marijuana companies were also unsuccessful.
You also have to consider government regulations and legal considerations because laws can change at any time which will result in companies having to adjust their operations to avoid legal action. Before investing you should make it a point to research the company’s growth strategy.
At the end of the day, any investment comes with potential risks and it is ultimately up to the investor to decide if those risks are still worth the investment. The cannabis industry is still in its infancy but is doing exceptionally well with consistent growth which makes this a promising industry to invest in.