Investing in Cannabis Stocks? Here Are 13 Things You Need to Know

Medical marijuana has long been a popular way to invest in the industry. Just understand that while university-level studies have found intriguing correlations between medical pot and certain ailments, the U.S. Food and Drug Administration (FDA) recognizes cannabis and its cannabinoids as having two benefits. That’s it! To the FDA, marijuana and its cannabinoids are largely unknown, which puts a ceiling on the potential for medical cannabis in the crown jewel U.S. market.

5. Not every company is going to be a winner

Fact: No matter the industry, or how fast it’s growing, not every company can be a winner. Though we’re admittedly in the early innings of a long maturation process for the industry, grower CannTrust Holdings (NYSE: CTST) is looking as if it’ll disappoint investors. CannTrust recently admitted to growing unlicensed cannabis in five rooms between October 2018 and March 2019, which has subsequently led to 12,700 kilos of inventory being put on hold and all sales operations ceasing. Currently awaiting its punishment from Health Canada, CannTrust is a solid reminder that there will be winners and losers, as with any industry.

6. All nascent industries encounter growing pains

To build on the previous point, all new industries endure growing pains. Sure, marijuana has been around for a long time, but legalizing adult-use pot in a developed country is unprecedented, and there are bound to be issues that arise. So far, we’ve witnessed supply issues in Canada caused by a mammoth license application backlog and compliant packaging shortages, while in the U.S. we’ve seen