Contributor: John A. Collins
The cannabis industry, and all the marijuana stocks within it, are booming. That’s pretty much an undeniable fact at this point. Ever since its inception all those years ago, the marijuana industry has done nothing but gain momentum with each passing fiscal quarter, and the amount of cannabis stocks and marijuana companies one can invest continues to grow along with it. In short, there is a lot of money floating around in the cannabis industry in the form of pot stocks, and it has a lot of people wondering how they can become a part of this burgeoning, super-profitable industry, through some of the best marijuana stocks, while it’s still (technically) in its infancy.
Everything You Need To Know Before Investing In Cannabis
People always want to “strike while the iron is hot,” so to speak, which makes sense. But, with the cannabis industry showcasing its unprecedented longevity and revenue-related records, it has people champing at the bit to get a piece of the proverbial “pie” through cannabis stock. But, with so many marijuana stocks available, it’s hard to know which one to invest in.
Which marijuana companies and weed stocks are the best value? Well, to be honest, that answer is always changing, but that doesn’t mean you’re out of luck. You just need to know what to look for, and what to consider, before making a hearty financial investment in cannabis stocks.
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First of all, you should know that there are two routes one could take, when it comes to financially investing in marijuana companies, or any industry, for that matter. Those routes are the private and public options.
Now, to be fair, most of us cannot even think about wasting our time with private investments in private companies, as those circumstances require an exorbitant amount of income. Which, when you think about it, makes sense. These up-and-coming companies don’t want pennies from a bunch of different investors, as that simply wouldn’t help accelerate their business plans, or overall model of business, whatsoever.
That’s why they often rely on a select few wealthy individuals, all of whom meet strict monetary requirements, to offer up some much-needed capital. That way, they can further their business ventures, before they (hopefully) go public at some point in the near future. So, unless you have upwards of $1 million dollars in assets, not including your home, you’re better off concerning yourself with the public side of financial investments.
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Speaking of, when discussing public investments, that’s basically exactly what it sounds like. It’s an investment that is open to every single person, regardless of their financial standing. And, if you’re wondering what kind of options you’ll be looking at in this regard, you should know that there are well over 500+ companies that have gone public in the cannabis industry, and there’s likely to be even more as time goes on.
That said, you won’t find any of these companies scrolling across a ticker on any major exchange, because these companies are majoritively OTC, which is just a fancy way of shortening up the phrase, “over the counter.” That means they routinely do not file with the SEC, which many investors see as a suspicious way to invest.
You see, when dealing with companies who are strictly OTC, things can get a bit unpredictable.
For instance, when a state finally lifts its ban on cannabis and legalizes marijuana, these companies will skyrocket damn near immediately. But, just as quick as they soared to those profitable new heights, they just as quickly come crashing back down to Earth, and they often do so at unpredictable times. This sudden drop in revenue makes investing in a public cannabis company a rollercoaster of monetary-related emotions. It’s almost impossible to know when it’s a good time to sell, invest more, or simply stay put.
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But that doesn’t mean it’s impossible to invest properly in a public cannabis company, you just need to ask yourself a few pointed questions before making any major moves with your money.
First, you should ask yourself if you are thinking too locally. Are there other potential marijuana-related investments more worth your while in other parts of the world? Just because a cannabis company isn’t in the United States, doesn’t mean it should be ignored. There are plenty of quality “money makers” out there on the global stage, and you owe it to yourself to thoroughly research all of the overseas options before finalizing a decision.
Another thing that would be important to consider before making a large financial decision in the marijuana stock market, is to carefully consider just how a cannabis company is making its money. Is it dependent on any variable factors that may come into play in the future?
For instance, if you are looking to invest in a vape-only company, maybe an upcoming study in the scientific community comes out, proving all vape pens are hazardous to people’s health in unexpected ways. That would render vape pens damn near illegal, and thus your invested-in company will go belly up.
But, conversely, let’s say you notice a cannabis company is getting a lot of revenue from a litany of different realms in the cannabis industry. Perhaps, they have been able to accomplish that for a handful of years now. That sort of data proves that this company is super stable, and likely can weather any sort of unforeseen “storm” that may hit the cannabis industry at any given time. That sort of homework would, in turn, solidify this once-risky public investment.
Finally, think about if there are any more lucrative opportunities out there in the cannabis industry that people haven’t thought too much about. I’m talking about companies who don’t even come close to the plant at all. This could be specific branding agencies with a specialty in marijuana-related advertising campaigns, or perhaps there’s a vaporizer manufacturer out there with big plans to become a household name in the cannabis community. There are a lot of other ways to invest in marijuana, without specifically investing in the plant, itself.
However you choose to go about investing your money, you can rest assured that, if you do your due diligence and appropriate research, you should be able to see a substantial return in no time.
Just be smart, do your homework, and everything should work out fine.
