It appears the day for marijuana and cannabis investing has finally arrived in full swing, as the evolving trend of states considering marijuana legalization in the U.S. has assuredly spiked interest in the cannabis investment markets. But, the full legalization of recreational marijuana in Canada could be leading the first real charge into the new investment opportunity.
The legalization of CBD products alone has interested many investors up to this point, along with medical marijuana authorization. And now that it appears several states are looking at some form of legalization for THC products in the very near future.
This means the market for marijuana investment is opening up even more than before for the investors with no prior understanding of what would happen when legalization becomes a reality. Just as with any other investment opportunity, the place to get in is on the relative ground floor. That is exactly where the marijuana investment outlook is situated for the long run, and there are several strategies to evaluate before sinking your assets in weed.
Long and Short Opportunities
Typical investors use one of two basic strategies when buying stock. They will either buy with the intention to hold and let the stock gain value over the long term, or they will invest looking for an opportunity to sell when growth is seen quickly. The cannabis investors in the first wave bought in when massive amounts of funds were being sunk into the market, causing many options to inflate in value with little prospect of a short-run return. These investors who have chosen to stay in the market were largely forced to buy and hold. That dynamic is currently changing when the new legalization trend becomes more en vogue, which also means the time is now to buy with the possibility of a solid growth opportunity after a couple of years. And bargain purchases will abound as the market opens up, which means cannabis and marijuana-based portfolios will be prime for both long and short strategies.
Potential Short-Term Profits
Many individuals who are new to marijuana investment will want to find opportunities first that have been recently profitable. These companies are still relatively few in numbers and they have grown based on the CBD industry and Canadian legalization. Understanding which marijuana stocks to buy could be as simple as looking at these companies, which include:
- Canopy Growth Corp (NYSE: CGC)
- Aurora Cannabis (OTC: ACBFF)
- Cronos Group (NYSE: CRON)
These companies all have both long and short potential, and they have shown excellent growth over each of the past few years as they are now poised to stay on the incline in both profits and corporate expansion for the near future and beyond.
As markets open up in the United States there will be many new companies and corporations established, and the number of companies offering lower-priced options will become abundant.
These stock purchases are designed for those wanting to invest incrementally at a small purchase level and watch the value grow over time, including potential splits down the road. One of those companies that are already in a good position for gradual expansion is Marapharm Ventures(MRPHF), which has been a company investing in health and wellness until recently when they announced they will be moving into medical and recreational marijuana markets. Marapharm is a prime example of the investment opportunities in cannabis and marijuana that will emerge in the very near future.
How to Invest in Cannabis
The federal legal restrictions for marijuana in the U.S. will still have a serious impact on the markets until some uniformity can be determined. All CBD products are federally legal now that Congress has passed legislation, but they have yet to remove marijuana from the registry of controlled substances.
This will indeed be the genie being let out of the bottle for the cannabis industry, but the individual states will also be looking to extract as much revenue as possible in making recreational marijuana legal. Medical marijuana is not even legal in all 50 states as yet, but the tide is changing and all states are strapped financially. It may be best for current investors to either remain or enter the market by purchasing through the legal Canadian stock market until the volatility in the U.S. ends.
The cannabis industry is clearly one of the hottest investment areas in the contemporary market. And it has become so much so that even the investor with no knowledge of marijuana on any level may want to get in now while the trend is turning the corner for both short and long-term positions.