Politics aside, there’s a lot of green to be made in the burgeoning legal marijuana market. As more states move toward legalization, the potential to profit grows higher and higher. But in many cases, it’s still just potential.
While the industry is worth watching for investment opportunities, there are also some very real downsides to investing in cannabis right now. Read on for our roundup of the pros and cons of investing in weed.
Cannabis industry growth is soaring
According to cannabis research group ArcView, legal marijuana sales in North America increased by 34 percent to $6.9 billion in 2016. A prediction from investment firm Cowen & Co. puts the U.S. market at $50 billion by 2026. More than half of all U.S. states have already legalized the use of medical marijuana, while eight states and counting have legalized recreational use for adults.
Another triumph is the story of cannabinoid group GW Pharmaceuticals, whose stock has skyrocketed nearly 1,300 percent in value in less than four years. What’s more, a growing percentage of Americans are supportive of marijuana legalization. Public support for legal cannabis has grown to 60 percent, according to a 2016 poll by Gallup. All of this makes for fertile grounds for further cannabis industry growth.
Marijuana could become the next dot-com bubble
When it comes to cannabis stocks, Canada is leading the scene. Unburdened by the depth of opposition that recreational marijuana has raised from the U.S. Attorney General and many in the U.S. Republican party, Horizons Medical Marijuana Life Sciences ETF — one of the first cannabis ETFs in North America — started trading on the Toronto Stock Exchange in April, almost instantly becoming one of the month’s most popular funds. Propelling the marijuana ETF toward further success is a rise in investor enthusiasm sparked by the legislation recently introduced by Prime Minister Justin…