When it comes to popular investing trends, cannabis stocks are near the top of the list. The marijuana industry has grown rapidly over the past decade. And this makes investing in cannabis a more attractive opportunity than ever.
Because the industry is so young and still faces legal challenges — such as marijuana being illegal at the federal level — it's important to do your research and learn how to invest in cannabis stocks.
Because the industry is so young and still faces legal challenges — such as marijuana being illegal at the federal level — it's important to do your research and learn how to invest in cannabis stocks.
The Short Version
- It's been rocky for the cannabis industry recently but upcoming legislation at the federal level might smooth things out.
- There are many companies for investors to choose from, including companies involved with medicinal and recreational cannabis.
- Besides stocks, you can also invest in cannabis ETFs and cryptocurrencies.
- Because marijuana is still illegal on the federal level, there is a greater level of risk.
Medical vs. Recreational Cannabis Stock
When it comes to the marijuana industry, there are generally two different markets: medical marijuana (MMJ) and recreational marijuana (RMJ).
>Medical Marijuana Stock
Medical marijuana first became legal in California in 1996. But today MMJ is legal in 37 states, the District of Columbia and three U.S. territories. Because it's so widely legalized — and has been for quite a few years — there are plenty of opportunities to invest in MMJ stocks. The categories of companies whose stock you can purchase when it comes to medical
>Recreational Marijuana Stock
Recreational marijuana (RMJ) is legal in 19 states, the District of Columbia and two territories. Colorado and Washington became the first states to legalize the recreational use of marijuana in 2012. Legalization for RMJ hasn't gained traction as quickly as it has for MMJ, but this use caters to a significantly wider audience. Marijuana companies you can invest in for recreational marijuana include cannabis growers, retailers, and ancillary product and service providers.
Why Investors Should Buy Cannabis Stocks
As marijuana legalization becomes more widespread, it's going to become more common to find marijuana stocks in investors' portfolios. You may find yourself wondering whether you should be joining in.
The main benefit of considering getting into marijuana stocks right now is that the prices have fallen sharply due to oversupply and the marijuana bubble bursting, causing cannabis stocks to be at bottom-level prices. That said, there are signs that the cannabis industry could see signs of growth shortly.
Senate Majority Leader Chuck Schumer announced that Congress is “very close” to passing a bill for marijuana banking and expungements.
