Are Marijuana Stocks A Good/Bad Investment?
In the recent years, scientific researchers, healthcare doctors, patients and activist groups have been devoted to legalizing medical marijuana throughout the United States. This devotion has made significant progress so medical marijuana is now officially legal in several states.
18 states and Washington D.C. have legalized marijuana for medical use (Washington and Colorado allow for responsible adult use) and there is many more states legislation pending. Patients use medical marijuana as a treatment for chronic pain, AIDS, glaucoma, nausea, vomiting, insomnia, lack of appetite, and many other health issues.
Due to medical marijuana’s increased popularity as a health care option, dispensaries are capitalizing on growing, distributing, or otherwise offering marijuana to patients who use it as a doctor-recommended herbal medicine. It is now time to acknowledge these changes in law and also explore financial investment opportunities as a result of this legitimate industry that is emerging in our economy.
Currently, you can trade “marijuana stocks” which are public companies that offering products and services in the lawful medical marijuana and cannabis markets. The majority of marijuana stocks are considered “penny stocks.”
So, What Exactly Is A Penny Stock?
According to Wikipedia, “…are common shares of small public companies that trade at low prices per share. Such stocks can be highly volatile and subject to manipulation by stock promoters and pump and dump schemes.”
You can understand why investing in marijuana stocks can present a high risk for investors who are often lured by the hope of large and quick profits.
The international healthcare business Bayer – recognized mostly for its household aspirin products – for example, just recently authorized licensing arrangements with a small biotech business in the United Kingdom that specializes in the delivery of the active ingredient (THC) in marijuana. Many other sizable corporations are considering cultivation and mass production of cannabis to serve the recreational markets such as Colorado and Washington.
By purchasing stock in publicly traded companies that are positioned to profit from medical (or recreational) marijuana, it is possible that you can get in on the ground floor as this industry experiences huge advancements in biotech and the medical care field.
Many of the companies in the medical marijuana and cannabis industry are not yet successful. Many investors that have invested capital to start new cannabis-related companies and they may not see profits for numerous years, if ever since many startup companies fail.
Patients, Care Givers, Dispensaries And CannaBusiness
Caregivers play the most significant role, they assist patients and help them to acquire their medical marijuana. And as more states have adopted medical marijuana there have been much more caregivers and dispensaries that have opened their doors for business and they grow medical marijuana on patients’ behalf.
For example, many patients can either choose to have a caregiver provide them their medicine or they can grow the medicine in their home or in the backyard (if an option). Many patients choose to buy their medical marijuana at dispensaries and as a result of their decision: dispensaries make a profit and pay millions of dollars in taxes which generate huge revenues for their state.
In the future you will likely see more public companies in the areas of nutrients, sprays, personal and business indoor growing systems, and much more.
Marijuana Stocks = The Wild West Investment?
This is the “wild west” when it comes to investing in marijuana stocks and you do not want to invest in these types of stocks with money you cannot afford to lose. We advise investors to be cautious when you are investing in marijuana stocks, there will be companies who will do very well in the cannabis industry in coming years.
A much safer bet would be to invest in dispensaries who currently making a profit by selling medical marijuana, a low-cost startup company (such as an Internet- or knowledge-based product or service), or businesses that will supply materials to the cannabis industry.
Much more scientific research has recently started to better understand the medicinal properties of marijuana. As it becomes legal in more states throughout the United States, it will eventually be sold like a normal over-the-counter medication and these medicine producing companies will surely get a piece of the action.
Other cannabis business might get their market share of the market by packaging and distribute it, by developing new medical or commercial hemp applications or as simple as growing medical marijuana and taking care of patients.
The future is bright for medical marijuana around the world and if you decide to invest in this emerging industry, you will be in a position to profit and be involved in one of the fastest growing industries in our economy. We do not pretend to know which marijuana stocks, dispensaries, or companies will be successful in this new marketplace.
But, there will certainly be some very successful companies and you may decide that marijuana stocks are the right option for you to get invested in this emerging industry.
Let us know what you think.