With recent changes to regulations regarding hemp across the United States, interest in marijuana stocks is at an all-time high. The rise in marijuana stocks has caught the attention of both hemp enthusiasts and those looking to make it big playing the market.

With so many people trying to jump on board, investors must understand the difference between hemp and marijuana. It’s easy to get them confused, but there are some significant differences that might impact how you choose to invest.

Here’s what you need to know about investing in hemp vs. marijuana stocks:

Understanding Hemp

When people talk about hemp, they are referring to the varieties of cannabis that contain no more than 0.3% THC by dry weight content. Before the passing of the Agricultural Act of 2018, the term “hemp” was typically used to describe any non-intoxicating cannabis.

Hemp is used to make a number of goods and foods such as rope, clothing, soaps, paper, and more.
marijuana stocks

Understanding Marijuana

Marijuana classifies the varieties of cannabis that contain more than 0.3% THC by dry weight and is known for having a psychotropic or euphoric effect. Marijuana was given a bad reputation in the early 1900s that it couldn’t shake for nearly a century.

Confusion and ignorance led people to believe in “reefer madness,” a propaganda term that helped pave the way for marijuana prohibition.

Comparing Hemp and Marijuana

While both hemp and marijuana are generally considered part of the cannabis family, they do have some significant differences.

Chemically:
They differ in the amount of THC present. Simply put: Hemp cannot get you high.

Legally:
Hemp and products made from hemp are currently legal so long as there is no more than 0.3% THC.

Marijuana, conversely, is treated as a controlled substance by the federal government. But more states are legalizing marijuana use in some fashion, and many predict it will be federally decriminalized in the future.

Cultivation:
Hemp is grown to maximize its size and yield.

Marijuana is more often bred with more control over temperature, lighting, and humidity. The goal with marijuana is to grow female plants that yield budding flowers.

Usage:
Hemp is typically grown to make a variety of different products.

Marijuana has long been used for recreational purposes, but has been found to offer therapeutic effects as well.

Both can be used to create CBD.

Hemp and Marijuana Stocks

Canada is home to some of the largest publicly traded cannabis companies. For many years, these organizations couldn’t do business in the United States due to legal restrictions.

After the passing of the U.S. Farm Bill, hemp was officially distinguished as different from marijuana. This law helped Canadian cannabis companies grow and create plans to enter the U.S. Some U.S. states, like New York, were granted licenses to process hemp locally.

As more states legalize the use of Marijuana, it seems that the U.S. could follow after Canada’s footsteps and allow hemp and marijuana companies to open on domestic soil.

People who have watched the growth of the Canadian marijuana stock market grow see the same potential at home. Beyond domestic companies coming to fruition, investors are also taking advantage of putting their money behind Canadian companies as allowed by law. Smart investors who get in at the right time are set to do really well.