Cannabis is a steadily growing industry, thanks in part to its legalization in parts of the world and its emergence as a medicinal drug and treatment of pain relief and numerous health issues. Like any industry, cannabis can be invested in, but will investors experience big returns? Those who keep their eyes and ears open to growing industries pay attention to those that are likely to yield large returns and decide when, where, and how much to invest in. Most investments carry a certain element of risk, and that is why many investors hire financial advisors and risk-analysts to guide them in their choices. When it comes to investing in cannabis, IPOs (initial public offerings) seems to be where it’s at.
IPOs and RTOs
The 2019 cannabis market started with a big bag. The Global Cannabis Stock Index gained over 40 percent in January after a big drop in 2018’s fourth quarter. The market is aggressive, and lots of investors are looking for new areas of the cannabis market to invest in, such as IPOs.
IPOs are stocks that are being offered to the public for the first time, and these are different from RTO (reverse takeovers). RTOs represent faster ways for a stock to go public as it merges into a company that already has trading stock. In both IPOs and RTOs, investors have the option of buying the stock before it starts getting traded, and the advantage to that is getting it for a lower price than post IPO or RTO. So why doesn’t everyone do this? It’s not an option for most as to access stock before its made available for trading to the public, you either have to be an accredited investor or have a direct connection to a Canadian investment bank.
Cannabis IPOs such as Innovative Industrial Properties, CanniMed Therapeutics, and MedRelleaf did not finish 2018 well. While most people sold off their shares and saw them sit at below $20, they are now trading for over $60. Investing in Cannabis stocks, like any type of investment, involves a balancing act of when to buy, how long to hold on to, and when to sell.
Current cannabis IPOs have been performing very well. SLANG Cannabis, a large-scale branding company known for its vaporizers traded their IPOs on the Canadian Securities Exchange and did very well.
Another company that has fared well is Plus Products, a cannabis edibles manufacturer almost doubled its IPO trades. Other companies that have proven that investing in cannabis is not only possible, but can also be extremely lucrative are Charlotte’s Web, Tilray, and Green Organic Dutchman.
Stocks come and go, but those that have staying power are those that have a firm niche and are steadily growing industries. The cannabis industry certainly fits that description as numerous dispensaries are popping up in places where it is legally sold, bought, and ingested.
As more and more people are turning to cannabis for medical purposes, cannabis dispensaries are becoming another worthy investment for those looking to benefit from the growing cannabis industry.
With the growing number of studies confirming the health benefits of cannabis, more and more people are purchasing it. While many still view it as and use it recreationally, establishments that sell different strains for different uses are becoming more commonplace. These businesses make worthy investments as their popularity is increasing as the social stigma is gradually lessened due to its legalization in more and more parts of the world.
With the increasing demand for cannabis, grow farms are in more and more demand, and many business people are choosing to invest in grow farms that strive to meet the current and growing demand for the substance. Cannabis farms can produce massive amounts of cannabis that can be sold to dispensaries, organizations, or individuals.
Cannabis farms are increasing as the demand for the plant’s effects increases around the world. As its use becomes more and more commonplace, those with a keen eye for business are considering the multiple ways in which a person can invest in the cannabis industry and come out on top.
From investing in cannabis stocks to dispensaries and grow farms, one thing seems likely; that is that cannabis is here to stay. While many still use it solely as a recreational drug, the numbers of people using it for medicinal purposes has steadily been on the rise for the last decade. As more and more studies are being conducted on the pros and cons of long-term use, cannabis has become a commonplace name and substance that promises a lot of investment potential for those with the business acumen to research the most lucrative areas of the industry. To answer the question, “Can you invest in cannabis?” The answer is a resounding ‘yes’.