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August 20, 2018

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Is Investing in Cannabis Stock a Good Idea?

March 18, 2019



Few people have missed the exponential growth in support for legalizing cannabis. The number of states that have legalized marijuana for recreational use is growing. 10 states have made it legal for adult use, with 21 more considering bills that would do the same. When you factor in the states that have decriminalized marijuana and the ones that have made it legal for medicinal purposes, the numbers are even higher.


Additionally, the last few years have generated substantial gains in marijuana stocks and many investors have been reaping the benefits. As a result, many people are considering investing in an industry they never would have previously considered. It is estimated that the market, in the United States alone, will reach over $20 billion in three years.


Is investing in cannabis stock a good idea? A cannabis business lawyer can help you make an informed decision.


Here are a few things to think about.


Is Investing in Cannabis Stock a Good Idea?


Fortunately for investors, to generate capital, many organizations in the cannabis industry have decided to go public and make shares in their business available for purchase. Thanks to state regulations, more and more companies are going public at an early stage. Because of this, the potential for growth in the industry is high. The growth potential is possibly the most convincing argument in favor of investing in cannabis stock.


The aggressive progression of the field is not limited to the United States. Canada legalized recreational marijuana use in Q4 of 2018, attracting the attention of many investors who are now evaluating Canadian cannabis stocks. The numbers for our neighbors to the north will not be as high, but revenue is still projected to be in the billions by 2022.


Two years ago, Germany made medical marijuana legal. They are poised to be the largest cannabis market outside of the U.S. So, is investing in Cannabis stock a good idea? Experts are predicting there is a possibility that the world-wide cannabis market will triple by the beginning of 2023. However, every rose has its thorns.


One of the risks to investing is that the projections for growth will not come to fruition. Another consideration is that, on the federal level, marijuana is still illegal in the U.S. The federal government could still make things difficult for cannabis-related companies.


Map Out Your Organization’s Strategy with a Cannabis Business Lawyer


At Verhagen Bennett, we are a full-service law firm at the forefront of legal services and strategies as they pertain to the cannabis industry. We provide counsel not only to entrepreneurs looking to start a business, but also dispensaries, testing laboratories, manufacturers of cannabis-infused products, and business clients seeking to expand their organization. Our network of lenders, investors, consultants, inventors and vendors makes us a valuable ally in your fight to gain market share.


To learn more about our legal services and how we have helped dozens of business clients, schedule a consultation or call (310) 917-1064. Let us assist you in navigating the constantly changing legal landscape of the cannabis industry.


For questions or comments about this post, please email us directly at: info@VerhagenBennett.com


© 2018 Verhagen Bennett LLP — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.


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