Is It Safe to Invest in Cannabis-Based Stocks? A Look at the Weed Market
- The CBD industry is expected to be worth $200 billion in the next 10 years.
- Regulations imposed by the FDA and other authorities could impact the success of this market.
The CBD industry is starting to thrive, especially since the passing of the Farm Bill last year. As a result, investors are working to get involved with this industry while it is still young, causing stocks to rise fairly quickly. However, just like any investment, it is important to have an understanding of just how safe these investments are, according to Cannabis Health Insider.
As stated above, CBD is still a new industry, though there are predictions that state that the next ten years will be highly profitable. However, the reason that these predictions are so massive is due to an average compound annual growth rate with big numbers that will likely last for the next decade. For this reason, cannabis is likely to continue to be fairly profitable.
In cannabis investments, the United States has maintained its status as the most consistent investor in the world’s market. Ultimately, there’s the opportunity to make about $100 billion of the predicted $200 billion in sales that the global market is expected to see. However, other analytics show that annual legal marijuana sales could reach $166 billion.
By getting involved with these stocks, investors need to consider more factors that just the cultivators, and there are already many to choose from. However, ancillary players will be a major part of the flourishing of the cannabis industry as well, especially for e-commerce and hemp-based products. Shopify, for example, is allowing some areas of Canada to use their services for cannabis, which means that investors should also consider the companies that offer cannabis products as well.
Clearly, cannabis is having success so far, and there’s already research to suggest that cannabis usage and treating disease have a strong relationship. However, the Food and Drug Administration have only been able to verify some of these details to legalize the substance in food products. If approved, the cannabis business could skyrocket, but these stocks could take a major turn if the FDA ultimately bans cannabis from food, beverages, and supplements.
Regardless of the pace of marijuana’s growth, not all businesses are designed to succeed in this industry. There are going to be company’s that fail, and consumers should be constantly alert about the impact of legalized cannabis in the black market. As with any investment, go into these endeavors with the most information possible.