How to Invest in Cannabis: A Guide to Cashing in On The Green Rush

Business marijuana leaves cannabis stock exchange market

Contributor: Brittany Iverson

The California Gold Rush of the mid 1800’s is like the, “green rush,” of 2019. The term, “green rush,” is used to describe the current growth rate within marijuana industries. You see, 2018 was the year of hemp and with the revised United States legislature, agricultural reform took on a whole new meaning to hemp-heads and potheads alike.

With this reform, industrial hemp became legal along with other exciting initiatives. The Farm Bill, otherwise known as the Agricultural Reform Act of 2018, ended prohibition on hemp-derived products for research, pharmaceutical use and industrial production. This exciting change in American’s perspective on hemp comes hand-in-hand with relaxed penalties across the country. Looking forward, the future of cannabis and hemp in America includes more states with medical and/or recreational programs. With any luck, the next 3 -5 years of hard work may even bring an end to pot prohibition at a federal level.


For now, hemp and marijuana farming hangs in the balance as private investors continue to profit off of the cannabis industry.

During this time, we can only hope to cash in on the green rush taking place. An important way to understand how to make money is learning the differences between hemp and cannabis plants.

Hemp -vs- Marijuana: Understanding the Differences Before Investing

Before you consider what type of investment you want to make during the green rush, you need to know the very basics.

Hemp

This is a plant that contains a wide range of valuable compounds. Spiny, leafy and very tall, hemp plants range between 6-15 feet. They can be used for fiber, oil, ground meal (for grain), as well as medicinal compounds including CBD and other cannabinoids like small amounts of active (tetrahydrocannabinol) THC, as well as terpenes. Hemp is gentle on the soil thus hemp cultivation is commonly used for regenerative farming purposes.

Marijuana

The similarities between hemp and marijuana include the 113 cannabinoids they contain. However, one of the main differences is that cannabis plants are smaller, less fibrous and they produce a significantly larger amount of the psychoactive compound known as tetrahydrocannabinol (THC). In many countries, including the United States, the distinction between the plants is strictly based on the THC levels.

Conclusion

Hemp plants have low levels of THC (<0.3%) while cannabis plants may have 3 to 30 percent THC

How Can I Make Money With Cannabis?

Business concept medical cannabis . marijuana stack of coins rising

The green rush began when medical marijuana programs first started popping up in the early 2000’s. Today, various types of smoke shops and cannabis products have been born. If you want to be less of a customer and more of a money-maker, here are 5 ways you can start earning as an investor:

How-To Invest in Cannabis - 5 Ways to Start Earning During the Green Rush

  1. Green Stocks. Did you know that cannabis stocks delivered a market performance more valuable than gold, Bitcoin and the broader market? Today, the frenzy can be called a green rush. But where should I invest? The largest soaring pot company stocks include price-to-sales ratios of 132, while others (Aurora Cannabis) is valued at $9.2 billion, and trades at 106. To put that into perspective, Apple and Amazon.com have p-ratios around (wait for it) 4. The top three cannabis stocks by market value include Tilray (13.4b), Canopy Growth (11.4b), Aurora Cannabis (9.2b).
  2. Think BIG. The rapid growth of the international hemp and cannabis market is what makes the stocks so valuable. However, if you do not know which companies to invest in, you could be troubled trying to make money off of cannabis stocks. Although the industry is speculative, diversification is usually an effective way to combat spikes and sudden shifts in the market. First-time investors looking for a solution to diversifying their investments need to find an Exchange-Traded Fund (ETF), that offers exposure to the biggest players of the hemp and cannabis industry. ETFs are most typically set-it-and-forget-it investments.
  3. Go International. Investing green means going international. The U.S. is a driving force in marijuana, but when it comes to hemp, there are other countries far ahead of America. Hemp is just now taking root in the U.S. and thanks to the Farm Bill, limited production will allow a slew of new opportunities. However, other countries are still leading the way in hemp production (long since legal in many places). Look to these countries: Canada, France, Australia and India for the future of green rush investing.
  4. Open a Dispensary. There are so many opportunities for you to get involved in the cannabis industry. A hot topic for cannabis investors includes how-to open a dispensary. There are numerous steps you can take on the path of investing in cannabis as a dispensary owner. A few of the things you need to consider before investing in cannabis dispensaries include capital, budget, licensing, product transportation and storage, competition and of course your dispensary customers.
  5. CBD Products. You can make money starting your own CBD company. Establishing an LLC is easier than you may think and today, many CBD wholesalers are looking for individuals to run their own CBD companies. Not only could you start a product line of your own, but you could also market it and even open an online CBD shop of your very own. Creating a CBD brand is not for everyone. You will need to first have a passion for CBD, then develop a business plan, follow the laws, find a wholesale supplier, create a product identity and labels, and lastly, further establish the brand.
hemp plantation

While success as a cannabis investor can be challenging, with the proper planning you can achieve your goals and cash in on the green rush. Today, the booming cannabis and hemp industries are ready to take over the world. While new products, jobs and investment opportunities continue to sprout up across the globe, investing is a journey. The American hemp market is expected to reach 1.8 billion dollars by 2020. Are you ready? Use this short guide on how to invest in cannabis to capture your own passion in the legal market. Then, choose your moves wisely and plan for a long-term relationship with your cannabis investments.


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