Many investors shied away from cannabis stocks initially. Some feared that shifting laws might cause the industry to collapse while others were simply uncertain about getting involved in a marijuana business. However, after some companies have experienced success, including Cronos Group and GW Pharmaceuticals (both of which became 10-baggers for early investors), some are reconsidering their position on cannabis. If you are wondering whether it’s too late to invest, here’s what you need to know.
Is It Too Late to Invest in Cannabis?
To put it simply, no, it isn’t too late to invest in cannabis. The legal cannabis market is already worth more than $10 billion, and it’s poised to keep growing.
In the United States, legalization efforts are still spreading. As of the start of 2020, 11 states have legalized recreational and medicinal marijuana. Another 33 states have legal, medical marijuana. And those numbers don’t include decriminalization legislation, which covers additional areas.
Ultimately, this means legal cannabis use is expanding. New markets emerge along with legalization legislation, creating opportunities for cannabis-oriented companies to reach larger customer bases.
Plus, many cannabis companies aren’t just in the United States. There are multi-national operations as well as companies that solely operate in other countries. Since legalization is also expanding on a global level, this means there are options that you may miss if you focus exclusively on your local markets.
In the end, there are a lot of opportunities to invest in cannabis and a significant amount of growth potential. As a result, it likely will never be too late to get involved, technically.
What You Need to Know About Cannabis Stocks
Before you invest in cannabis, it’s important to be aware of a few things. First, the market is highly volatile. Even many of the leading companies experience substantial price swings. These stocks aren’t for the risk-averse or those who want to jump the moment there’s a downward shift. Price volatility is part of the paradigm; it’s that simple.
Second, the United States federal government has not legalized cannabis, and that will remain a potential point of concern. That means the government still has the ability to criminally charge certain marijuana operations for violating federal laws. This leaves a degree of uncertainty in the air and could result in serious issues for investors and companies if the government decides to take quick action against a business.
However, acceptance overall is rising. Additionally, the federal government may one day change its position on cannabis, and that would be a game changer. While that isn’t guaranteed to occur, many legislators believe that legalization on the federal level is the right move, and it may go forward at some point.
Have you invested in cannabis? If so, are you happy with your returns? If not, is there something specific holding you back? Share your thoughts in the comments below.
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