Investing in the Cannabis Industry: No Longer a Pipe Dream

This post is part of a series sponsored by Worldwide Facilities, LLC.

In 2020, cannabis spending hit $29 billion. By 2024, global cannabis market revenues are expected to surpass $42 billion. As a result of all this spend, the number of cannabis stocks and exchange traded funds has increased exponentially over the past two years.

Despite the interest, the biggest obstacle to capitalizing on the cannabis industry by way of investing depends on what extent marijuana will be legalized – on both a state-by-state basis and on the federal level. As we begin to see more states legalize cannabis, there’s little doubt that even more new opportunities for investing in the industry will open up.

Investment Opportunities Ahead

Today, the number of marijuana-related companies trading on public stock exchanges remains relatively small. According to a recent article by Investopedia, while investors in the U.S. have the option of working with over-the-counter exchanges, many of the most successful businesses in the early legal cannabis space are based in Canada or other countries. The source goes on to note that if cannabis becomes legal on the national level, companies would be free to list their stocks on all U.S. exchanges, creating more liquidity and providing access for those looking to invest.

When it comes to cannabis stocks, the investing website MoneyMorning.com identifies three primary types of companies to invest in. They include:

1. Companies that Grow the Product

Cannabis growers often make and sell marijuana-based products or run dispensaries, and are also frequently marijuana distributors.

2. Companies that Specialize in Medical Marijuana

This includes developing drugs that use the ingredients found in cannabis to treat medical conditions. Experts predict massive growth potential for cannabis biotech companies looking to expand into this sector as more people buy CBD-based products.

3. Companies that Produce Ancillary Cannabis Goods and Services

These companies help support cannabis businesses by contributing to a company’s bottom line and by presenting opportunities for growth in the future. They allow investors to gain access to the cannabis industry’s investment potential without the volatility of investing in a new sector.

As the legalization of cannabis expands, we’ll likely see more investment opportunities — and successes — in this emerging and growing industry.

If you are a retail agent or broker with clients in the cannabis, hemp or nutraceutical industry, it’s important to work with a wholesaler that is an expert in this space. At NutraRisk, a division of Worldwide Facilities, we are cannabis industry experts with access to liability insurance programs serving a wide range of business types and target markets.

To learn more about our cannabis and nutraceutical markets and programs, contact Norman Ives at nives@wwfi.com or 206-538-5290.

Disclaimer: This article is not meant to provide investing advice. Please contact your financial advisor when considering investment matters.

Topics Cannabis