So you’re looking at investing in one of the booming industries of the US, which is fast becoming profitable for those getting involved. However, the rapidly changing laws as well as the discrepancy between federal and state law means that there are some complications when it comes to investing. So what are the recommendations for those looking to jump into the stock market of marijuana?
Legal issues mean that it could be potentially illegal to invest in the marijuana stock market if it isn’t done the right way. Although it’s risky to invest in marijuana, it is potentially a great investment decision. The trick is doing it correctly and waiting for the right moment.
State and federal discrepancies
With marijuana being legal in states but illegal federally, there are risks involved. According to some, it is actually possibly illegal to invest in the international marijuana stock exchange. Despite this, it is an industry offering growth like no other, and there is no reason to be deterred.
According to Hilary Bricken, a Seattle-based attorney who writes about cannabis law, investors could be prosecuted under the Controlled Substances Act if they earn money from Canadian marijuana stocks. In Canada, marijuana is federally legal, and so investors can make money online from the Canadian pot market. This could land investors in a lot of trouble under American law.
Investing in equipment companies
Most companies selling marijuana are privately owned because of the federal laws on the matter in the US. However, there are companies that are invested in the marijuana industry that are not selling or handling the plant at all, but are handling products associated with it. For example, a company in Denver called Medicine Man is selling marijuana products on the private market. Their sister company, Medicine Man Technologies is selling equipment available for marijuana growers. They are not in the business of selling the plant at all. Their market value is at $23.7 million.
The trick with investing in the marijuana market at this very moment might be steering clear from companies that are handling the plant and focusing on those that are distributing products to growers. There are many companies out there selling lighting, growing installations as well as equipment. As the marijuana industry continues to grow, so too will these companies.
Picking the right time
At this stage in the new marijuana industry, things are a little bit shaky and a little insecure. With it being federally illegal still in the USA, there is of course still the possibility that the marijuana industry will take a turn. It is important to be paying attention to the industry and the politics that come with it. These laws make medical research almost impossible, so this is not a good industry to invest in currently.
Scott Greiper, president of Viridian Capital Advisors (a cannabis consultancy company) says that if marijuana is legalized federally, that would be the right time to invest in the biotech space. Frank Lane, president of CFN Media says to watch out for the explosion of the health an wellness part of the marijuana industry – such as topical creams for example. One of the best suggestions for the current marijuana market is MassRoots, a company based in Denver. They are launching a cannabis social networking website which is expected to hit 1 million members this month.
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