When states choose to make marijuana legal for medicinal or recreational use, they do more than give patients new medical options and please current and would-be marijuana fans. States that legalize marijuana all but eliminate an illegal marketplace and replace it with a legal one. Where once marijuana was a non-factor in the state economy, it’s quickly become one of the fastest-growing and most important ones. That means big opportunities for business owners — and for investors, too. If you’re curious about investing in marijuana, you’ve come to the right place. Here’s what you need to know.
Why invest in marijuana?
Before we discuss the “how” of investing in marijuana, let’s talk about the “why.” There are a lot of industries to invest in — why does marijuana stand out?
To understand marijuana’s appeal from an investment standpoint, you need to study the industry’s history. A few decades ago, marijuana was illegal for both medicinal and recreational use in all 50 states. There was no legal marijuana industry — but marijuana was, of course, being consumed nonetheless. Marijuana use was common in the 1960s, 1970s, 1980s, and in more recent decades, even if the only businessmen and businesswomen making money on it were operating on the wrong side of the law.
So when states began to legalize marijuana, they created an industry that nobody expected would follow normal growth patterns. Marijuana isn’t new — only its legality is. The customer base is already there. Throw in the fact that state laws legalizing marijuana tend to artificially restrict licences, and you have a relatively small industry facing explosive demand. And as more and more states legalize marijuana, new legal marketplaces are added to an already fast-growing space. All of this means one thing: big-time growth.
The future of the marijuana business
How much growth are we talking? An awful lot: by 2024, the legal cannabis market is expected to exceed $60 billion in value. That’s “billion,” with a “B.” Some observers even predict a future in which the marijuana business is bigger than the beer business. If that’s even close to correct, we’re in for a wild ride.
In short, the marijuana business is booming. It’s growing quickly and reliably in a way that few other industries could imagine, and that creates very exciting investment opportunities — opportunities that you can take advantage of, if you know how.
How to invest in marijuana
Like other businesses, marijuana businesses sometimes offer stock (mmj stocks) — shares in the company that can be traded on stock markets. That means that you can ride the wave of marijuana success, provided, of course, that you choose the right stocks.
See, not all marijuana stocks are created equal. And just because marijuana is booming doesn’t mean that every company will grow (remember, stocks are valued by the market — and you’re not the only one who sees a bright future for the marijuana business). So keep your head on straight and do your research! Remember to maintain a diverse portfolio — don’t put all of your cash into just one company (or even into just the marijuana industry). Consider funds that collect marijuana companies into larger portfolios — a mutual fund or exchange-traded fund can help you create diversity in your portfolio more easily. Examine each potential investment carefully, and read up on marijuana stocks in the news on websites that focus on covering the industry.
If you do all of this, you should be able to choose your investments wisely and secure your own little chunk of the marijuana business’ future riches. Good luck!