Marijuana Investments Could Go Up In Smoke

Investing in a Marijuana Farm

The Entar Investment Newsletter project continues this week with a look at how to invest in marijuana. Cannabis is legal in one form or another in over 30 states. When will the Federal Government release its death grip on the use and sale of cannabis? Big Tabacco is waiting in the wings to apply industrial might to the sector. Perhaps those are the safe stocks to bet on as the smoke clears.

According to Market Research, the projected global medical marijuana market is growing at an annualized rate of just under 20% through 2028. Much of this growth will likely be here in the USA, where 35 states have already legalized medical cannabis. Medical cannabis products sold in the U.S. include dried flowers, vaping concentrates, cannabis-infused edibles, and topical products such as lotion.

Investors who opt to buy individual medical marijuana stocks can choose among Canadian or U.S. companies. Canadian medical cannabis companies can legally list on U.S. stock exchanges, while U.S. medical cannabis companies lawfully operating at the state level can legally list on Canadian stock exchanges and over the counter (OTC).

Before investing in medical cannabis companies, find out what you need to know about this growing sector.

How to choose the best medical marijuana stocks

Investors should consider the same critical attributes for medical marijuana stocks that they would for any store:

  • Financial performance: Many medical marijuana companies aren’t yet profitable, but the best companies have clear and defined plans for achieving profitability in the future. The safest companies also have plenty of cash, which creates financial flexibility and preserves the value of the stock.
  • Growth opportunities: The patchy regulatory framework of the marijuana sector means that medical cannabis companies’ growth prospects vary widely. Geographic constraints minimally limit the best companies.
  • Competitive position: Leading medical marijuana companies with high production capacity, plenty of distribution channels, and beneficial partnerships with established companies.

If you don’t want to choose specific stocks, another way to gain exposure to medical marijuana stocks is to buy shares in a cannabis-focused exchange-traded fund (ETF). This confers instant diversification across the cannabis sector, although no pure-play medical cannabis ETFs are currently available.

Should you buy medical marijuana stocks?

Investing in the medical marijuana sector is relatively risky as long as cannabis remains federally illegal in the U.S. The plant’s federal status also constrains the industry’s growth, and investors have no guarantee that the federal government will continue to allow states to treat cannabis as legal.

But the long-term prospects of the medical marijuana industry are excellent. More countries and U.S. states recognize the potential benefits of medical cannabis and legalize the use and sale of medical cannabis products. More individuals and the broader medical community also recognize the plant’s medicinal benefits, driving demand higher for medical marijuana. Risk-tolerant investors with long investing horizons are likely to profit by investing in medical marijuana.

The marijuana industry may double in value by 2025, and many investors are seeking to profit. In addition, as states and entire countries decriminalize cannabis and its components, there are growing opportunities for entrepreneurs and existing companies.

But, as in any nascent industry, there are also plenty of investment risks. So whether you’re a first-time investor or a seasoned veteran, it pays to understand how this industry works. This guide will get you up to speed quickly and includes our picks for the top marijuana stocks.

Marijuana use was legal for most of human history until the early 20th century. Between 1916 and 1931, 29 U.S. states banned the use of marijuana. The Marihuana Tax Act of 1937 essentially made cannabis illegal across the U.S.

While cannabis remains illegal on the federal level, most U.S. states have legalized the use and sale of medical marijuana, and an increasing number are legalizing the plant for recreational use. Here’s the lowdown on marijuana legalization within the U.S #entarispowerful #investment #newsletter

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What’s next for marijuana legalization?

Medical and recreational marijuana use remains federally illegal, with the Controlled Substances Act of 1970 classifying cannabis as a Schedule I drug. Despite this classification, which is reserved for substances with no accepted medical use and a high potential for abuse, the medicinal benefits of marijuana are hard to dispute.

More states are likely to legalize medical and recreational marijuana in the coming years. As public support keeps increasing and the number of marijuana stocks is rapidly proliferating, more states are being enticed by the potential for significant tax revenues from cannabis sales.

Efforts are also underway in the U.S. Congress to enact significant cannabis reform at the federal level. Many cannabis proponents believe that it is only a matter of time before marijuana becomes legal, or at least decriminalized, nationwide.

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