Undeniably, one of the biggest market trends in recent years has been marijuana investments. What started off as an experimental novelty has steamrolled into a legitimate industry. Today, it’s not at all uncommon for entrepreneurs interested in legal cannabis to start their own “green” business.
Clearly, “weedpreneurs” as they’re often called have come out of the woodwork in a substantive manner. As a Google search term, marijuana investments are sometimes on par with interest in cryptocurrencies. And compared to just a few years ago, publicly-traded cannabis firms are exceptionally plentiful.
The problem, though, is option quality. With very few exceptions, all public-security based marijuana investments are traded in the over-the-counter markets. These pink sheet, or penny-stock exchanges, don’t carry the same reputation as larger exchanges due to their lower oversight standards.
As a result, most people avoid cannabis as an investing vehicle, even towards the utilitarian sector of medical marijuana. I believe, though, that this attitude will change for three reasons:
International Momentum for Marijuana Investments
Canada took a major step not only towards marijuana investments but cannabis acceptance as a whole. A few months ago, our northern neighbor became the first G7 nation to legalize recreational marijuana. Notably, although public opinion surveys vary, a recent study indicated that most Canadians and Americans favor legalization.
Eventually, this legalization trend will shift towards other countries, making Canada appear less distinct. I suspect that weed surveys are tilted somewhat negatively. After all, cannabis still has a stigma associated with it, despite obvious benefits such as medical marijuana.
But with Canada taking this important step, others will likely follow its lead.
Expect Cannabis to “Reschedule”
Despite a record number of states legalizing cannabis to varying degrees, most American weed businesses have trouble securing basic services, most critically funding. The reason? The federal government classifies marijuana as a Schedule I drug. This means that on paper, cannabis is on par with hard narcotics like cocaine.
However, I believe cannabis will “reschedule,” if for nothing else than money. Colorado demonstrated how big of an impact the marijuana industry has had on its state budget. Other states recognize this success, and will appeal to the fed’s sense of rationality.
Marijuana Investments a True, Frontier Market
If you’ve missed the boat on cryptocurrencies when they were sold at a fraction of the price they are today, marijuana investments represent a perfect opportunity. That’s because they are a true, frontier market with viable, upside potential.
Plenty of investment analysts talk about frontier opportunities, but the reality is that thanks to the internet, there’s nothing new under the sun. That’s also true for marijuana investments, but here’s the thing: no one really knows how big this opportunity can rise because relatively few are willing to take the risk.
For a speculative, high-risk, high-reward sector, marijuana is it.