According to Viridian Capital Advisors, cannabis companies raised nearly 14 billion dollars in 2018, which is significantly up from the 3.5 billion that companies raised in 2017.
With cannabis reform spreading like wildfire all across the globe, the opportunity for the cannabis industry to expand is absolutely enormous.
Chances are, you are likely considering investing in the cannabis industry. But what is the best way to do it without your hard-earned dollars disappearing into thin air?
Beware of misconceptions and misleading information
If something seems too good to be true, chances are there’s a reason for that. Just because the cannabis industry has a lot of potential doesn’t mean that a successful investment is automatic.
It is easy for people to get caught up in the hype and let their emotions get the best of them when making an investment in the cannabis industry.
The first thing that potential cannabis industry investors need to do is conduct an enormous amount of research on the industry in general, as well as about the specific opportunity they are looking at.
If you see a specific claim being made, drill down on it extra hard. See what other people are saying and what questions they are asking about the claim, whether it be about a company or their product(s).
The cannabis industry is full of opportunities for investors, and it is also riddled with pitfalls at every corner due to the competition level and money involved, so always be mindful of that.
How much do you have to invest, and what level of risk can you be comfortable with?
Once you have performed enough research to feel comfortable with navigating the cannabis space, the next thing that you need to do is determine how much you have to invest.
As previously stated, you need to be careful to not let your emotions get the best of you and in the process over-extend yourself financially. And it can be easy to get emotional about cannabis when learning how many people it can help and how many lives it can change.
Determine what amount you can comfortably invest and plan on letting it sit in place for a while.
Investing in cannabis is not a get-rich-quick situation, so if that’s what you are planning on happening, you need to update your level of expectations and adjust your investment amount accordingly.
Once you have determined how much you can comfortably invest, you need to consider what level of risk you are willing to take on.
As with any industry, typically the bigger the risk, the bigger the reward. Cannabis is no different. Investing in a startup can provide a lot of growth potential, and is also a risky move.
Cannabis stocks provide a good balance for novice cannabis investors
Cannabis stocks have been around for a while now, but it wasn’t until recently that they started to receive the level of attention that they do now.
In the past cannabis, stocks were considered to be next to worthless by serious stock evaluators, with the risk greatly outweighing the reward.
But the rise of the legal cannabis industry in Canada has created a number of opportunities for stock options.
Companies based in the United States are getting in on Canada’s stock market, and Canadian companies are getting in on the United States stock market.
Cannabis stocks are a great option because you can look at historical data on any of the companies, and the buy-in is low compared to investing in a startup.
Cannabis stocks can be risky, with some being riskier than others, and you also don’t have to commit nearly as much money to get some skin in the game.
Staying up to date with what is going on in the industry is vital to future success
Making a successful investment is often all about timing. That is true in any industry, including the cannabis industry.
Staying up to date on important cannabis news and cannabis reform efforts could mean the difference between being a savvy investor and losing all of your money.
Understanding this plant and the industry around it makes all the difference.