The legal cannabis industry is a high risk, high return investment option. The United States currently has uncertainties regarding the future of cannabis legislation as it is still considered to be an illegal substance according to federal law. However, despite these reservations, cannabis companies continue to see skyrocketing revenues, especially during the present global situation.
While the country was under lockdown during the current pandemic, cannabis was declared an essential service. Moreover, the SAFE Banking Act allowed banks to provide services to cannabis companies without having to worry about being federally prosecuted. Cannabis is also perceived to be a recession-resistant industry. Moreover, an increasing number of states are looking towards legalizing and regulating the various aspect of the cannabis industry. These factors have made the cannabis sector highly profitable.
The major benefit that comes with investing in cannabis is the high yields and ROI that you will be able to enjoy. There continues to be an increase in technological developments and innovative designs that have provided even more room for growth. On the other hand, there are several things to be aware of, including high risks and uncertainty due to the industry being relatively new and lacking proper management.
Investing in cannabis can be done in several ways. Firstly, you can look into investing in stocks. Experts have predicted that the market will be worth approximately 150 billion USD by 2035. You can invest in stocks for marijuana growing companies, cannabis-focused biotechnology companies, and those that provide products and services such as consultation, distribution, packaging etc. to the cannabis sector.
Another way to invest in cannabis is through cannabis related commercial real estate. This sector includes medical and recreational cannabis. Medical-use cannabis has been legalized in a majority of states, while recreational cannabis still remains illegal in a number of regions.
There are a variety of options, including cultivation spaces, licensed growing facilities, warehouses, industrial buildings, greenhouses, and other properties or facilities related to cannabis. You can either purchase a facility or invest in one with other investors through a Real Estate Investment Trust (REIT).
These options, however, are riskier than investing in any other form of commercial real estate. All regulations and guidelines provided by the state need to be complied with, a license must be acquired. In the case of non-compliance, the property can be banned, and the property owner can be prosecuted. Moreover, these guidelines and regulations are different in each state, so you will need to be particularly careful if you invest in multiple properties across the country.
Despite these risks, the cannabis real estate sector has the potential for increasing growth and even higher returns. The industry will continue to flourish further, and with increasing state wide legalization, more lucrative investment opportunities will be presented for investors.