Are you looking forward to investing in Marijuana? Looking to make some green off the green? Don’t throw darts at a board. Read on and capture tips from this Noobs’ Marijuana Investing Guide.
So you probably know that the cannabis industry is thriving, right? Recent trends place sales set to go over $15 billion by next year and expected to double every year after that. Green, it seems, is the new gold.
There are numerous ways to make money of this green rush. Starting your very own business in the cannabis industry seems the most likely way, and you can check out our guide via this link for a bit of help, getting a job in the industry, like the one we have on this link here, is another. But supposing you’re the type of person who wants to get your feet wet first OR you don’t have the time (yet), there’s still a very critical part of the marijuana business that you can get into and make money off of: Investing
Investment is the most crucial piece of any business, just ask Dr. John Stith Pemberton (google that if you don’t know who he is). In fact, it’s where the real money is made. If you’re looking to make some green off the green, here’s a few tips to get you started:
Do you take your coffee black or not-so-black?
Marijuana is riding a train towards eventual full legalization in the US. Canada really set the standard. If you’re a still feeling a bit queasy at that prospect, then it might benefit you to know that you can get in the cannabis industry without dealing with marijuana at all.
The US Agricultural Act of 2018 has effectively separated Marijuana and Hemp, with hemp being fully legal. While both are members of the cannabis family, legal hemp is defined as strains with less than 0.3% THC (tetrahydrocannabinol, the cannabinoid responsible for psychotropic effects) as opposed to marijuana whose levels can reach up to 30%.
Bottom line: Hemp cannot get you high. It does still give you many cannabis-derived products like textile, paper, rope, seasoning, fuel, compost, soaps, creams, paint and above all, medication. The best part is that research is still ongoing into many of its other practical applications (just like marijuana).
That being said, obviously by choosing to go into a hemp-only investment – and while this market by itself is large – you are going to be missing out on revenue from the recreational side of things.
I know a guy…
While it’s often said that business and friendship don’t make the best bedfellows, it’s probably best to look close to home for businesses you can invest in. With people you know, you’re: a) probably going to have some degree of trust, b) going to be able to see where your investment is going, and c) going to have a better chance at striking ground floor investment opportunities.
…who knows a guy, who knows a guy…
Of course, local opportunities may not quite offer the same earning potential. This is where things get exciting.
Stocks – or equities – are shares of companies that you buy for some part ownership in said company. When the company makes money, you make money, when the company loses money, you lose money. Simple.
There are a number of ways to look for these companies. You’ll find them publicly listed and traded throughout the Net, via a newspaper, via the TV, via an app, via the radio etc. etc. Do your research then pick them out. Once you’ve decided, you’ll just need to create a brokerage account to buy or sell stock.
Once you’ve bought stock, the fun begins. You can either sit on it and wait or take an active role in it. If you decide to take an active role, brace yourself. Look we’re not here to go Gordon Gekko on you, but the short of it is that you’re going to be reading through stock news, company news, market trends and – should you want to do so – actively trading. You can then work towards the ultimate end-goal of buying enough stock for control. Or not. Your choice.
We do have one Gordon Gekko-tier tip for you: Diversification
“Diversification” is a big technical, financial l33t-speak word, yes? Yet in simple words, you’ve probably heard it all your life: Don’t put all your eggs in one basket
But wait, aren’t we talking about investing specifically in the cannabis business? You said that’s where the big money was, right?
Yes. But each individual publicly traded company is a basket in and of itself. Now you can choose which companies you like best in different levels of the business (one for the planter, one for the retailer, one for the packager, etc, etc) and invest in them individually or invest in Exchange Traded Funds (ETF).
An ETF is a pooled investment of several companies linked together by a common business – in this case, the cannabis business. So instead of having to individually pick out businesses one-by-one, you can choose to invest in just an ETF which then grants you access and exposure to hundreds and thousands of companies. What’s more, these ETF’s are run by people who live for this – professionals whose purpose is to make your money back and then some. Heck, you can watch how they do things, and when you’re confident enough and have learned what you need, then venture off on your own!
Of course, ETF’s aren’t foolproof. Nothing is in the investment world is. What it does offer is a chance to get your feet wet and your best chance to learn the ropes.
These days, investing has never been easier. You can practically get in the business with practically no knowledge and just your fingertips. The marijuana business is especially promising because it is a new frontier with exciting possibilities ahead. What’s your excuse?
Still on the fence? Try reading up on our pros and cons here. Want more news on the market or on movers and shakers in the marijuana business? Sign up for our newsletter!