Global marijuana markets are, pardon the pun, growing like a weed. Worldwide spending on cannabis topped $12 billion in 2018, according to ArcView Market Research and BDS Analytics. The total is projected to increase to $31.3 billion by 2022, a compound annual growth rate (CAGR) of 26.7%.
With this type of impressive growth, it’s no wonder that many investors are interested in investing in publicly traded cannabis stocks. What’s the best approach for marijuana investing? There are seven key steps:
- Understand the types of marijuana products
- Know the different types of marijuana stocks
- Understand the risks of investing in marijuana stocks
- Know what to look for in a marijuana stock
- Evaluate the top marijuana stocks and exchange-traded funds (ETFs)
- Invest carefully
- Monitor changing industry dynamics closely
Here’s all you need to know about this seven-step process for investing in the fast-growing marijuana industry.
1. Understand the types of marijuana products
There are two broad categories of cannabis products: medical marijuana and recreational marijuana. Within these two categories are several specific types of products.
Medical marijuana currently is broadly legal in 33 U.S. states and in several countries across the world, including Canada and Germany. A prescription from an authorized healthcare provider typically is required for patients to obtain medical marijuana. It’s frequently prescribed for anxiety, depression, pain, and stress.
Medical marijuana, also referred to as medical cannabis, can be inhaled by smoking either dried flower or vaping concentrates. It can be consumed via edible products that contain marijuana or cannabis-infused beverages. There are even topical creams and lotions containing marijuana or chemical ingredients from cannabis.
One of the most commonly used medical marijuana products is cannabidiol (CBD). CBD is one of many chemicals in the cannabis plant known as cannabinoids. It doesn’t have the psychoactive properties of another important cannabinoid, delta-9 tetrahydrocannabinol (THC), but appears to