Photo by Esteban Lopez on Unsplash
People have been using the cannabis plant for centuries, but it was only the last few decades that revolutionized the industry. With the growing popularity and widespread legalization of the herb all around the globe, it has become a lucrative market. Many cannabis companies are entering into national as well as international stock exchanges, that every investor has their eye on.
Do you plan to invest in the booming cannabis industry? Are you wondering whether it is a wise choice? Read on to know why you must invest in the cannabis market
Six reasons to invest in the cannabis industry:
If you look at the most lucrative market segments that are growing exponentially, the cannabis industry must be holding the top spots. It has led many investors, big and small alike, to grasp the potential and make the most of it.
Here are few reasons why you must invest in the ever-growing cannabis industry:
1. Legalization of cannabis:
The use of cannabis has been frowned upon in many parts of the world, but it is gradually changing. People are becoming more open towards the magical herb, and so is the government. Many countries like Canada, New Zealand, and Thailand have legalized cannabis, while others are following suit.
In the US, the passing of the Hemp Farm Bill in the year 2018 has come as a ray of hope for all the industry players. Although the law only legalized the sale of hemp-derived products like CBD, experts believe that it can pave the way for recreational cannabis as well. The Food and Drug Authority (FDA) has also approved two cannabis-based drugs, Epidiolex and Sativex and placed them in Schedule V now. The manufacturers don’t require prior approval from the FDA to produce these drugs.
The legalization has made it possible for users to buy the herb without any hassle. They can visit a nearby dispensary or even order weed online.
2. Increasing sales:
In the past few years, cannabis has become a buzzword. The popularity of the plan has grown exponentially, and the sales are rising with it. Earlier, cannabis was only a means of recreation, but people now realize the therapeutic effects of the plant. There is increasing evidence to validate the benefits one gets from using cannabis, which has led to a surge in sales.
The sales of legal cannabis in 2018 amount to $10 billion in the US alone and experts believed that the numbers would multiply each year. By the year 2023, the sale of cannabis will be higher than $20 billion. As the sales of cannabis companies keep going higher, the investors will undoubtedly earn more profits in the coming years.
Photo by Jason Briscoe on Unsplash
3. Greater clarity in the industry:
When it comes to cannabis, there has been ambiguity in the industry with contradicting and confusing laws. There has been a difference in state and local level cannabis law, leading to distrust among investors. In the last decade, the government is making efforts to regulate the market. Some stricter laws and regulations govern the industry and help bring clarity.
The government has also allowed banks to get involved in the cannabis sector, unlike before. The cannabis companies can open a bank account or avail credit from financial institutions, which is helping strengthen the industry. Even in countries where cannabis is legal, companies face trouble with financing, but the reforms have helped them with it. It is also reducing the chances of frauds and money-laundering that were prevalent in the cannabis industry.
4. Market versatility:
Another factor that contributes to the growth of the cannabis market is its versatility. To cope up with the increasing demand, cannabis market players are bringing in new products. It had led to many new industries popping up. The market is brimming with cannabis-based products, like edibles, topicals, tinctures, capsules, and much more. With the introduction of nano-technology, brands are trying to experiment and make headway with cannabis beverages.
Besides that, there is a growing interdependence between the industries. From wellness to the cosmetics industry, cannabis is becoming an active ingredient in their products. These industries are not only realizing the benefits of cannabis but also taking advantage of the hype around it.
Photo by BATCH by Wisconsin Hemp Scientific on Unsplash
5. More investment options:
For many people, the cannabis industry only meant cultivators and dispensary owners. But, it has changed since the expansion of the industry and dependence of other sectors on it. There are a plethora of viable options available for investors today.
You have the option whether you want to invest in the plant-touching sector or ancillary. The plant-touching businesses include operations associated with the plant, like growing, processing, selling, and distributing cannabis. On the other hand, the ancillary businesses include operations like accountants, attorneys, tech companies, data platforms, marketers, and logistics. The ancillary businesses have less strict regulations, but they are still subjected to some of them.
6. Stability in the market:
Going by the current trend of the cannabis market, the time of upheaval is over. The industry is on an upward trend, and the numbers are only soaring. With the necessary rules and regulations, there is a sense of security among the stakeholders. It had contributed to stability in the market, and now is a highly lucrative time to invest.
Final Thoughts:
While the cannabis industry is experiencing a boom, it still offers vast potential. With the increasing popularity and diversifying product range, the industry will only grow in the coming years. If you plan on investing in the cannabis industry to earn profits, now is the time!