Mutual funds investing in marijuana companies

What companies should you keep your eye on? And how, exactly, can you get your portfolio growing like a weed? Read on to find out. FAQ How is investing in cannabis even a possibility? There used to be a time when investing in weed meant saving up enough babysitting money to buy a stake in a bag of schwag from some older kid who went to a different high school. Well, not anymore. But get this: That actually presents an excellent investment opportunity for you. Because their product is not allowed to cross over state borders, companies must fully build out their assets in whatever states they operate.

Many, though, have survived and thrived, making them sustainable entities with a path to high growth and outperforming returns for investors. Today, hundreds of U. OTC markets and the CSE, the biggest and most investable of which are commonly referred to as multi-state operators MSOs for their presence across multiple legal state markets—including right here in Massachusetts. These businesses generate revenue by growing cannabis flower; manufacturing branded products such as vapes, beverages, and edibles; and selling flower and related products through retail dispensaries and home delivery.

Why should I invest? Put bluntly no pun intended : Cannabis stocks are cheaper than they should be. Typically, the more a company is projected to grow, the higher its relative valuation and stock price will be. This is the reason businesses that have not generated a single dollar in sales can still be hot stocks. Yet despite having an unquestionable path to growth ahead of them, cannabis companies are valued similarly to grocery stores and other non-growth industries.

Consider that institutional investors own about 50 percent of consumer-staple companies and more than 70 percent of the tech space. That averages less than 5 percent for cannabis companies. This presents real advantages for everyday investors who are willing to take a chance on an industry that will only continue to grow like a, ahem, weed as legalization opens up new opportunities across the country.

When should I invest? Senate before the end of the year as a stand-alone entity or as an attachment to a broader measure. If not this year, looks promising regardless of midterm election results, as Republicans see benefits to stealing this issue from Democrats. Whenever, and however, it happens, banking reform will allow the biggest investors including the Fidelities and Wellingtons that we know well here in Boston to join the party, immediately raising valuations of cannabis companies on nothing more than new deep-pocketed demand.

Until the bill passes, though, the market still favors retail and hobbyist investors—including you, dear reader—and offers the potential for rarified gains even if the stock market crashes elsewhere. In other words: Get in while you still can, because this moment may be fleeting.

How do I invest? Terms apply. The current state of the industry makes an already risky strategy — picking individual stocks — even riskier. Regulatory uncertainty, financing hurdles and sheer unpredictability in business models and operations could significantly and quickly alter the future landscape, and in turn, the value of marijuana stocks and ETFs.

This designation, which puts marijuana in the same category as heroin, ecstasy and LSD, suggests it has no medical value and a high rate of abuse. This classification can lead to gray areas between state and federal laws. For example, the U. As long as enforcement is fluid, uncertainty will persist. If it becomes law, it would help protect depository institutions that supply financial services to marijuana companies.

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The current state of the industry makes an already risky strategy — picking individual stocks — even riskier. Regulatory uncertainty, financing hurdles and sheer unpredictability in business models and operations could significantly and quickly alter the future landscape, and in turn, the value of marijuana stocks and ETFs. This designation, which puts marijuana in the same category as heroin, ecstasy and LSD, suggests it has no medical value and a high rate of abuse.

This classification can lead to gray areas between state and federal laws. For example, the U. As long as enforcement is fluid, uncertainty will persist. If it becomes law, it would help protect depository institutions that supply financial services to marijuana companies. Moreover, the National Credit Union Administration issued interim guidance in to help credit unions navigate how to provide services to legal hemp businesses.

S The Colorado cannabis industry crushed over 1 million dollars in sales on their first day. Colorado is the state with the longest history of legal weed sales in the country. Because of this, Colorado is a good indicator for the rest of the country. Checking out the current economic markets of weed in the legalized states is a great way to predict the future of your home state.

If Colorado can make it work, so too can other places. Across the United States, legal weed sales produced some 6 billion dollars of revenue in In , the cannabis industry topped over 1 billion dollars in sales in Colorado alone. In , the sales from the first financial quarter had risen by another 30 percent. This means they are on track to beat another record this year. Always speak with a certified financial advisor, who can professionally guide your investment decisions.

In the meantime, perhaps you want to know just where you can read up on the cannabis stock market. Does it even exist? It sure does! However, there are no mutual funds available yet. Right now, there are only a few options including individual stocks and ETFs. Plus, the safest investments are in Canadian companies. In Canada however, things are rapidly changing. They have always had softer laws than Americans when it comes to cannabis, but on July 1, , weed will be legal for recreational consumption across the country.

This means that adults in every province can buy, sell, and consume weed as much as they want. Not surprisingly, the Canadian marijuana industry is ramping up for explosive growth in Cannabis Investment Options As of yet, there is no such thing as a marijuana mutual fund. However, there are other options. The marketplace is still in its infancy, and investors should be a bit careful with their money as the industry goes through growing pains.

One change in tax law could quickly throw the industry into a deep dive. So first things first, research and be ready for a little risk. Canadian Cannabis Investments Often more established, the long-term growth potential of the Canadian cannabis market is unmatched in America in Aurora Cannabis Unlike some of the American investments listed below, Aurora is directly involved in the manufacturing and distribution of marijuana products.

Since the date of their inception, almost three years ago today, their market shares have soared.