8 Important Reasons Why Investors Are Backing Cannabis Startups
There are lots of reasons investors are choosing to invest in the cannabis industry, and a lot of them, but not all, are green.
As the economy looks up from the hole it dug itself over the last few decades, investors and money managers are watching the cannabis industry with keen eyes. Now that several new states joined the legal ranks, business looks better than ever. Here are eight reasons those with dough are buying into cannabis startups.
The term “Cannabis Industry” can seem tiny. Growers, shops, and processors. But the reality is far larger. Legalizing cannabis has created hundreds of new companies handling behind-the-scenes aspects of everyday business.
Because mainstream companies continue to shirk most cannabis-related clients, new businesses have risen to fill the need. By identifying industry needs and catering to them, they have grown quickly. Packaging, security, staffing, web support, advertising, accounting, the list goes on.
Tech and app companies are some of the biggest winners in the weed work lotto. From tracking software to social apps, silicon and sativa go hand in hand. Investors have plenty of profitable options without their money touching the plants themselves.
2. Quick changes
The legal ups and down of the cannabis industry are ideal for nimble investors. One angry politician can make stocks plummet, and an upcoming vote can open markets to make stocks rise exponentially.
With a good pulse on events, anyone can predict the tides. The biggest players in the business today come from that exact mindset.
3. Personal belief
People put money where their beliefs lie. The undeniable benefits of cannabis have swayed some prominent people to the cause. More and more big names are standing behind cannabis, from celebrities to wealthy business owners.
4. Special considerations for risk
With the special tax and banking restrictions in cannabis, and the potential risks of a mistake, any business that wants to stay in it has an advisor. The constantly shifting regulations call for specialists to chart a safe course.
The support industry for cannabis has swooped in with skills to succeed, and the bill to back it up. Investing in these risk-management companies is the safest bet around.
5. Greater influence
Because of the newness of the industry, a lot of startups look to investors to relate to the underlying concepts of the business. Those familiar with these principles often become advisors as well as investors, ensuring the success of their investment.
For this reason, cannabis ventures see a greater selection of entrepreneurs and highly skilled management to craft success, and that makes for a sound investment.
6. Familiar concepts
The functions and needs of cannabis businesses are virtually identical to other industries. The basics of business are universal, and that gives comfort to wary investors. Behind the green are people, jobs, and money.
Investors who can grasp that can easily predict where to make the big bucks.
7. New territory
Though the business of business remains largely unchanged, the industry restrictions mean a learning curve.
For those who don’t have the passion for pursuing the knowledge, it stands as a barrier to participation.
But for those willing to take the steps, the limit acts as a blessing, keeping competition down for pieces of the pie.
8. Feeling good
Cannabis doesn’t just make people feel good from using it. The benefits of cannabis to others, and helping people get them, are a high all their own.
The most passionate cannabis advocates and the people who are in it for more than the money love helping others. Improving the world is a noble pursuit, and in such pursuits, what’s money in comparison?
There are lots of reasons to invest in the cannabis industry, and a lot of them, but not all, are green.