The cannabis investment spectrum is shining bright, continuing to raise capital with its irresistibly fresh charm and high profit potential. Cannabis stocks have been on a whirlwind rollercoaster this year, with 2018 being the most erratic year for cannabis stock shares so far. From Canada’s cannabis legalization to the myriad of companies debuting an initial public offering (IPO) of their publicly-traded stocks, there are many reasons why the value of the cannabis industry is skyrocketing.
Global cannabis Investments totaled $2.7 billion in 2017, according to data published by the PotNetwork. This figure is predicted to rise by the close of 2018, which saw numerous legal cannabis brands rushing to the cannabis stock market for their public trading listings. Tilray was the first cannabis producer to execute an IPO in New York, closing 32% up from its initial listing price.
Moreover, Constellation Brands made a major investment in Canopy Growth back in August of 2018, when the drinks producer invested close to $4 billion in the Canadian cannabis company. The investment accounts for around 104.5 million common shares of stock and will lead to the production of a range of cannabis-infused drinks.
With such a spotlight on the legal cannabis industry, there’s no wonder why so many investors are curious about the profit potential of pot.
Why is a cannabis investment a good opportunity?
Over the last few years, the cannabis industry has continued to develop in numerous arenas. In particular, the United States and Canada have experienced immense growth in their industries combined. In fact, the North American cannabis market will present investors with a $92 billion opportunity by 2026.
The emerging cannabis sector and its assorted components present consumers with a chance to medicate, and provides investors with an opportunity to capitalize on what could be the best-returning investment of their lives.
Smart investors can make a relatively confident investment in the cannabis industry, since worldwide spending is forecast to hit US$32bn by the year 2022. This is according to predictions from BDS Analytics and it is a major surge from current cannabis expenditure, demonstrating consistent growth in consumer cannabis consumption and an invitation for investors to get involved.
Are there risks associated with a cannabis investment?
As with any other industry, investors need always to be aware of the potential risks. Globally, cannabis is not a well-versed nor studied subject as of yet. Recent academic and scientific research has worked to demonstrate some initial benefits in many ways, but the public is still relatively unaware of the plant’s potential beneficial properties as a product and as a medicine. The reality is that most of the public is more familiar with the ‘stoner stigma’ – something that could deter both uneducated consumers and investors.
Nonetheless, medical breakthroughs and scientific clinical trials are constantly being completed. Brands like Nutritional High’s FLÏ™ are educating the general public about cannabis, slowly transforming the negative stigma as they do so. This is helping the general public to learn more about the benefits of medical and recreational cannabis.
Behavioural insights indicate that many investors jump at the opportunity for a piece of the emerging sector. Notwithstanding, just like the dot-com bubble left numerous investors with big losses, the cannabis industry could do the same. Even beginner investors understand that risk is a part of the game.
How can investors mitigate risk in cannabis investment?
Approaching a cannabis investment with caution, in addition to optimism, is the best way to avoid risk. Pay attention to the highest-margin segments of the industry; a tactic that Nutritional High executes perfectly by employing leading manufacturing and extraction methods. Seeking out a well-established company like Nutritional High potentially mitigates risk because of the company’s commitment to innovation and product acquisition through the utilization of novel delivery systems is a bonafide way to make a confident cannabis investment. Other companies in the industry also have established great infrastructures, unique technologies, and full-scale business models that could help to mitigate general investor risk.
Nowadays, consumers are focused on compliant, consistent, and quality products, so steer clear of a cannabis investment if a distributor cannot prove a robust portfolio of successful brands. Moreover, the risks of failing with a cannabis investment can be less likely if you search for cannabis producers who work exclusively with licensed operators, since this will indicate they conduct operations that are fully compliant with applicable regulations.