With the proliferation of legal cannabis companies popping up around the United States and Canada, there exists a massive opportunity for those willing to invest in and follow marijuana stocks. Growers in California, distributors in Colorado, dispensaries in Washington state, they all have an untapped market at their disposal and a thirst for working capital. This is where the markets can play a role.
Everyone that starts a business has a need for capital. Smart investors with an eye on the future can be handsomely rewarded for the ability to provide that capital. That has been a working theory in the Western world for a great number of years. As cannabis gains public acceptance across the United States and more legal pathways for its sale and distribution are opened up in the states, the story is happening all over again. We could be at a similar crossroads as alcohol distributors in the early 1930s. Prohibition is about to fall by the wayside.
How can the average investor take advantage of marijuana stocks? The first answer is education. Learn as much as you can about what companies have a head start and how they plan to solidify their market position. Are growers more stable in Canada or California? How about ancillary industries like greenhouse manufacturers, legal services firms or marijuana focused publications? The growth curve for those companies could be just as impressive.
Day trading marijuana stocks right now is a great chance for high frequency traders to take advantage of the early years. With the federal enforcement level uncertain and more states allowing the production of cannabis, the markets can be quite volatile. That is a positive development for many day traders that want to make a quick profit. It helps to be knowledgeable about the marijuana market and other side industries, but the key is being in the right position at the right time.
Biotech companies in Canada are making great advances in cannabis products that do not have to be smoked. There is also a whole class of companies that are creating CBD products, which feature the part of the cannabis plant with anti-anxiety and pain relieving properties, but no psychoactive effects. When you take out the THC, you can still get some of the medicinal benefits of pot. The outfits at the forefront on those developments will be excellent buys at this time. The only way to go is up.
In Denver specifically, there are plenty of companies with ancillary activities to the cannabis industry popping up. Greenhouse manufacturers, mentioned before, can see a real boom in growth as more and more people are looking to get into the growing business. Legal services are in high demand, because of the uncertain regulatory environment. And then financial services companies are just starting to come around, because many banks have been wary, up until now, of signing on with marijuana growers. The ramifications of handling cash and being on the hook for federal trafficking charges loomed large.
Even with the caveats, marijuana stocks can be a serious opportunity for the right investor. You just have to know when and how to pick the stocks.