Investing in marijuana
In our recent series Should You Jump on the Marijuana Bandwagon? we briefly touched upon the marijuana industry from an investment perspective.
Arguably, most investment opportunities exist to increase the wealth of investors. At least that’s what an investor expects. However, not all investment opportunities are alike. Take for example the recent wave of cryptocurrencies, where some investors ended up getting burnt.
Considerations before investing
We must emphasize that each investment opportunity comes with its unique set of risk and reward characteristics, and the marijuana industry is no exception. Before considering marijuana-related investments, you must carefully consider the related risk and reward characteristics of the industry, which is what we’ll focus on in this series.
Stocks shoot up
The above chart shows how some marijuana stocks shot up in the last three months. These include Canadian stocks such as Aurora Cannabis (ACB.TO), Canopy Growth (WEED.TO), Aphria (APH.TO), and MedReleaf (LEAF.TO). US Stocks (XLB) such as AbbVie (ABBV), Scotts Miracle-Gro (SMG), Insys Therapeutics (INSY), and Corbus Pharmaceuticals (CRBP) also had a positive return.
As far as investments are concerned, they’re always forward-looking. So a marijuana investor should consider the future utility of marijuana. Given this backdrop, we’re compelled to first discuss the future of the marijuana industry before exploring the future of investment vehicles that could allow investors to participate.
We’ll begin with the evolving attitude toward the marijuana industry.