Best Cannabis Investments

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Smoking weed is only part of the pleasure this magical plant can bring to your life. If you’re a strong weed advocate and believe in the far-reaching potential of cannabis use for medical and recreational purposes, maybe it’s time to transform from a consumer to an investor?

The cannabis business witnessed an upsurge over the past year, with many more perspectives remaining unexplored. So, here we look into several options for weed investments, starting from as little as $5 in your pocket and ending with a full-scale weed business startup.

#1 Investments in Weed Stocks

Sizable gains in marijuana legalization in the USA started in 2009, giving millions of people a new business idea – investing in weed. However, not every weed fan or businessperson has enough money to set up a weed enterprise. Thus, a good idea is to support the already functioning weed companies, many of which initially developed in Canada and then came to the USA due to the loosening regulations.

Here are the best weed stock picks advised by Motley Fool experts for investment today. Many of these companies’ shares currently trade under $5, which is an excellent opportunity to start low and go slow as your weed stock portfolio grows:

• GrowGeneration (GRWG)
• Scotts Miracle-Gro (SMG)
• Cronos Group Inc. (CRON)
• Tilray (TLRY)
• Jazz Pharmaceuticals (JAZZ)

The companies we've just mentioned are traded on NYSE and Nasdaq already, paving their way to official listing on the stock exchanges. Another lucrative investment option is to pick the stocks before official listing while they are still on the OTC market. The most promising stocks in this category include:

• Green Thumb Industries (GTBIF)
• Cresco Labs (CRLBF)
• OrganiGram Holdings Inc. (OGI)
• TerrAscend Corp. (TRSSF)
• Trulieve Cannabis Corp. (TCNNF)

#2 Investments in Weed REITs and ETFs

If you are unsure of which company to invest in and have little money to invest in all of them, picking an ETF for investment is a better option. An ETF usually contains all cannabis-related stocks from the sector and combines them in a healthy proportion to offset the risks. Here is a list of ETFs and REITs you may choose:

• Innovative Industrial Properties (IIPR) REIT
• ETFMG Alternative Harvest ETF (MJ)
• AdvisorShares Pure US Cannabis ETF (MSOS)
• AdvisorShares Pure Cannabis ETF (YOLO)
• Global X Cannabis ETF (POTX)

#3 Setting Up a Dispensary

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There are many reasons to consider setting up your own dispensary in a state where medical and/or recreational marijuana use is legal. By looking at the success of numerous San Francisco dispensaries and considering the $18+ billion in weed sales across the USA annually, you can evaluate the cloudless profit perspectives in this business area. Experts note that by 2023, the gross sales of weed will exceed the revenues of the NFL – pretty impressive, right? Another bonus is a reasonable profit margin of dispensaries, becoming profitable in 1-2 years after their setup.

Obviously, this business startup isn’t devoid of underwater stones and initial challenges. You’re likely to find it hard to get a license for dispensary operation, which requires meeting strict requirements. You should prove your residency and go through a detailed criminal background check; your dispensary will be regularly checked for legal compliance, and that's only a part of the legal hassle. You also need to guarantee proper security measures for storing weed and money, as dispensaries often become the targets of gangs and addicts without money. But if you're perseverant enough, the effort will soon pay off as a stable, profitable business.

#4 Starting a Weed Growing Plantation

If you are more of a gardener than a businessperson in the soul, you can still make money on weed. As the weed business gets legal and expands across the USA, nothing stops you from organizing a small weed-growing farm, indoors or outdoors. It all depends on how much free space you have for these purposes and your growing skills.

However, you will likely face legal turmoil with this business. The weed-growing legislation is a mess of local and state rules, while on the federal level, it's absolutely illegal. So, you need to check your state laws first and find out how you can get a license for commercial growing. Be ready to pay a fortune for the license; for instance, in Connecticut, it costs $25,000 for the initial application, a one-time payment of $75,000, and an annual renewal for another $75,000. In comparison, growing weed in California is much more affordable. A small farm for up to 25 plants will require a $1,500 fee while having a medium-sized plantation will cost you up to $85,000.

So, when planning the growing business, check all fees and rules in your state. Weed is a steep ground where one wrong move can cost you a license, revenue, and sometimes even freedom. Thus, it’s better to check everything twice.

Weed Is a Lucrative Business Worth Trying

As you can see, the weed business is booming now due to a series of achievements in the legalization domain. Today, more retail investors are welcomed to the industry as stock investors and startup business people. Hence, it's up to you which path of entry to the weed sector you choose; the main thing is to analyze all risks and invest wisely.