By / October 12, 2018

The safest ways to invest in the cannabis industry

Cannabis stocks are hot right now as the upcoming legalization of recreational marijuana in Canada is drawing the attention of more investors. Although certain stocks are on the rise, investors should understand that the market is volatile, so they should not invest haphazardly.

As with most investment plans, there are risks and rewards for sticking with cannabis, but here are a few ways to greatly lessen the latter.

Invest in established brands

Along with the boom of the industry is a huge increase in players in the market. While there are those that are legitimate and adhere to regulatory standards, there are others who are cutting corners. It is similar to how there were countless ill-managed cryptos when cryptocurrencies become popular at the start of the year.

industrial marijuana
Industrial hemp will be classified as an agricultural commodity in the upcoming revision of the Farm Bill. (Source)

Nonetheless, there are a few strong brands to invest in. One such company is Canopy Growth Corp. The company is listed on the New York Stock Exchange making it easy to trade. Aside from that, it is also considered as one of the leaders of the industry. While these stocks are no longer cheap, investors do not have to worry about the company suddenly failing.

Invest in industrial hemp producers

The upcoming revisions to the Farm Bill see industrial hemp as an agricultural commodity instead of a controlled substance. Once the bill is signed, farmers in the U.S. will be able to plant hemp without restrictions. This comes at a great time as there is a growing demand for industrial hemp.

To meet the demand for industrial hemp, many farmers and companies are looking to increase their production greatly. For investors, this is a great opportunity to try out an alternative to marijuana in the US. Furthermore, hemp has a lot of other uses aside from medical purposes, so investors will be able to participate in a large market.

Investment, marijuana stocks
Investors can try investing in CBD companies instead of marijuana stocks as they are the safer option (Source)

Differences between marijuana and hemp

When talking about cannabis, people will readily think about marijuana and hemp. People tend to overlook the market for cannabidiol (CBD) products.

Unlike marijuana, there are a few restrictions when it comes to the consumption of CBD as it does not cause any feeling of being high to its users. Aside from this, CBD carries the health benefits that come with marijuana.

Invest in CBD stocks

Though the market is not as big as marijuana’s, CBD is slowly catching on. It is even expected to be worth $22 billion by 2022. Investors can try investing in CBD companies instead of marijuana stocks as they are the safer option. Additionally, a lot of CBD stocks currently sell for a small price so there is huge room for growth.

The cannabis industry is changing at a rapid pace. While the speed can be a cause for concern, investors should weigh out their options first before they make a major investment decision.

(Featured Image by nattanan23)

Comments are closed for this post.