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How to Invest in Hemp Stocks

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There’s now impressive public support for cannabis as evidenced by the increasing number of states that are legalizing its use for both recreational and medical purposes. It’s for this reason why experts have predicted enormous gains from marijuana stocks in the coming years. They have also predicted for the marijuana industry to be massive and in fact, the recent projection states that the US cannabis industry could reach a whopping $22 billion by the year 2022! Before you get too excited to invest, there are so many things that you need to learn about the hemp and cannabis stocks.

What You Need to Know About Cannabis Markets

To start with, it’s important that you understand the entire market of cannabis as a whole. This can help address some of your most basic questions. For instance, you want to know in which direction the industry is moving or if there are other industry sectors that are doing much better than the rest? Of course, these are just some of the basic questions to ask and there are so much more, especially for first-timers.

In 2016, the US market for legal cannabis was estimated to be at $7.06 billion. This is expected to grow at 24.9% from 2017 to 2025. As such, the cannabis global industry is expected to reach $32 billion. Of the two segments in the marijuana industry, medical marijuana is the largest segment and is expected to be valued at $100.03 billion by 2025.

Forecasts and Strategies

Cannabis use was made legal in Canada on October and investors are now piling in. However, this also led to the flooding of fraud peddlers. It’s therefore important for everybody to be careful when investing in this speculative market.

Meanwhile, the hemp stocks are moving up in anticipation of Canada’s massive legal market and hopefully, the United States will follow suit soon. Currently, there are now more than 30 states that have decided to legalize the medical use of cannabis while nine states have allowed it for recreational use. More states are expected to follow on the same path.

The biggest and the most publicly traded stocks in Canada is the Canopy Growth Corp. Canopy is growing very fast although it still hasn’t reached its profitability just yet and doesn’t pay dividends. Nevertheless, the outlook for this stock is positive. It’s a speculative buy but may not apply to conservative investors.

How to Invest in Cannabis Markets

Before you call your local stockbroker to start investing, it’s important to note that although some investors are making money buying cannabis stocks, there are many others that don’t. As with any type of investing, it’s very important that you educate yourself by doing extensive research. You need to understand the market well and know that there are two segments that make up the industry; the recreational and medical marijuana. The most commonly used product in the medical cannabis industry is the CBD or cannabidiol.

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