Weed Stocks 101: What You Need to Know
The cannabis industry is often considered to be the Wild Wild West of the equity markets. Since the industry is so new, most companies fall under the “development stage” designation with little in the way of revenue and profit. The majority of these companies also trade over-the-counter with little liquidity. These are dangerous waters for most individual investors that are oft-advised to stick with low-cost and diversified mutual funds or ETFs.
On the other hand, Canada has already legalized medical cannabis and has official plans to legalize the drug for recreational use. This could help set a precedent for the United States and other countries considering the same. In the U.S., ArcView Research estimates that the industry hit $3.5 billion last year and GreenWave Advisors reckons that it could hit $35 billion in size if all 50 states legalize the drug and the federal government ends prohibition.
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