Wall Clock7 min read
how to invest in marijuana industry

Takeaway: You know it is the right time to begin investing in Marijuana when gradually marijuana legalization might become a federal law. In addition to that, it has been long since we have seen any propaganda against weed. And there is proof for that, people opposing the legalization of Marijuana has fallen from 52% (2010) to 32% today. In addition to that, a massive majority of 91% of the U.S adults believe that Cannabis should be legal for medicinal and recreational purposes (59%), or it should be legalized for medicinal purposes (32%).

Gone are the days when marijuana was treated as the “dreaded weed”. Marijuana was treated as the “dreaded weed”. Remember the times when anti-propaganda films were made to raise “awareness” regarding the repercussions of smoking the ‘giggle weed’? 

Reefer Madness” definitely tops the list. It was originally made to school the audiences regarding the threat of Cannabis but is now treated as a satire. 

Another drama, “High on the range,” is a story about a man who turns into a murderer after smoking less than a single whole joint. 

While people viewed it differently during the time it was released, I am a hundred percent sure that the masses see it very differently in the current times.

Like the changing viewers of these films, the way people are viewing the Cannabis industry is changing rapidly. Nothing more is evident about the truth of this than the report by the New Frontier Data, which claims that the Marijuana industry would see a whopping growth of 16 percent and would easily be a 25 billion dollar industry by 2025.

People opposing the legalization of Marijuana has fallen from 52% (2010) to 32% today. A massive majority of 91% of the U.S adults believe that Cannabis should be legal for medicinal and recreational purposes (59%), or it should be legalized just for medicinal purposes (32%), according to the Pew Research Centre.

Now that we know the trends of the marijuana industry, we need to talk about a couple of things to understand Cannabis as a product and how one can invest in the cannabis industry.

  • Cannabis products can be broadly categorized into two types: medicinal Marijuana and recreational Marijuana. Marijuana health benefits are widely known, and most companies invest in the production of medicinal marijuana that is believed to alleviate the symptoms of certain diseases.
  • Another classification is that of recreational Cannabis, basically for getting high. In case it is legalized, more companies would focus and invest mainly in this area.

Since the marijuana industry growth is pretty evident and has caught the eyeballs of a lot of investors, different sectors have grown to employ a large number of people. According to the New Frontier Data, about 200,000 new jobs will be created by 2020 as a result of the fast-growing marijuana industry.

One can choose any of the following sectors to invest:

  • Marijuana farming

It all starts with the process of growing Marijuana. Cultivating Cannabis is a science is a science, and it needs certain conditions to flourish. Large organizations hire master cultivators or a director of cultivation, botanists, and specialists to ensure the healthy growth of the plant. 

The process involves cultivating, cloning, watering, feeding, and management of pests.

Since it’s an expensive process and has a good payback, a lot of mainstream farmers could make a shift to marijuana agriculture if it’s legalized.

  • Pharmacy

marijuana and medicine

A lot of pharmacies sell medicinal Marijuana. Some risk is involved since the federal government does a regular check, and the dispensaries need to be careful. Still, it does not make them a lesser productive sector of the industry.

  • Delivery Service

It requires minimal investment and has a low-risk factor. It involves door-to-door delivery of Cannabis, just like the delivery of any other product. With Uber getting into specialized delivery – like food, this sector could see significant growth with the business of delivering Marijuana.

  • Making of devices

The production of devices is a large sub-market that’s a part of the cannabis industry. A lot of tools are needed to enjoy the experience of smoking cannabis: grinders, vaporizers, devices for glass smoking. There are a variety of vaporizers, majorly portable, PAX-3 vaporizer and desktop vaporizers. It’s a massive area of product-based investment.

There are a lot of cannabis tech devices that also measure the dosage of Cannabis and are creating a wave in the industry – THC breathalyzers, metered dosing devices, medicinal humidors, etc.

  • Trimmers and tenders

Bud Trimmers clean up the buds and cut them by hand during the harvest season. It’s an excellent entry-level job for people who are looking to make a break into the cannabis industry. 

Bud Tenders are more like consultants since they deal with customers face to face and guide them to buy what they want. They basically advise. And who doesn’t need advice, right?

  • Contractors

For any large scale operation for the production of cannabis and related products, one needs a workforce. Whether it’s electricians, irrigation experts, crew for construction, equipment handlers, etc. 

It can be highly lucrative for companies to invest in building just the infrastructure and equipment for the industry. For example, Greengro Technologies is one such company that focuses mainly on building eco-friendly infrastructure for the cannabis industry.

  • E-Entrepreneurs

Due to the legalization of weed, many people got the opportunity to venture into entrepreneurial businesses, especially online businesses. Whether it’s blogs, marijuana-themed e-stores, sites to review, e-stores that sell equipment for the industry, etc.

  • Venture Capitalists

Auxly Cannabis Group, the 10th largest marijuana company, does not grow Marijuana or sell products related to that. It simply provides support to marijuana companies financially and in return, receives a percentage of their production, which is more often lower than the market cost. It then sells at the market rate and earns profits. 

A large number of companies are investing money into the industry since it’s growing by leaps and bounds.

  • Marijuana Tourism

Places where Marijuana is legalized, there has been a rise in the rate of tourism. People take cannabis tours that include visiting dispensaries, walking through the marijuana garden, learning how to use a vaporizer, etc. A lot of pot-friendly cafes have also sprung up in such regions, which is definitely a factor in profitable business.

  • Investment in Stocks

Invest in marijuana stock

Investing in Marijuana stocks is by far the most favored kind of investment since it does not require significant capital or a substantial investment. However, one can still profit from the marijuana industry stocks. There are three kinds of cannabis stocks or companies that one can look into:

  1. Cannabis growers: companies that grow or cultivate Marijuana and then sell/ distributes it to consumers or businesses.
  2. Marijuana biotechs: companies that produce and bring medicinal marijuana products to the market.
  3. Providers of products or services: These companies provide materials or tools required in the production of Cannabis like hydroponics, lighting systems, or provide services like distribution, consulting, packaging, etc.

There are a few things one should take care of before investing in cannabis stocks:

  • Research about the company thoroughly and look into its strategy for growth. It could expand organically or through acquisition.
  • Check to see if the company’s making profits yet or not. Since the marijuana industry is yet a budding one, it’s possible for the company not to make profits.
  • Research about competing companies and find out how the company you want to invest in is different from its rivals. The competitive landscape is essential and can give a lot of insight.
  • Stay up-to-date on the latest marijuana industry growth, analysis, and trends.

The legalization of Marijuana has opened up a lot of opportunities for entrepreneurs and investors. It’s leading to significant growth in the cannabis sector, and it seems like a good time to invest in the industry. But before investing, research, be safe, and check the laws of your state!

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