Is it possible to invest in cannabis?
As the world legalizes cannabis products, what are the prospects for the market? With the cannabis industry booming, a wave of investment has emerged, especially following the therapeutic cannabis legislation. Thus, many investors are wondering how to invest in the sector. A real craze has been created around this market full of potential. This phenomenon is indeed already remarkable in the United States and Canada where many companies have taken place, some of which are listed on the stock exchange.
Cannabis legislation is expected to continue to expand worldwide and will continue to represent a huge expansion opportunity.
The industry is made up of companies involved in the development, research, distribution and sale of the plant for both recreational and therapeutic purposes. One of the largest companies in the sector would be GW Pharmaceuticals, which alone owns 11.25% of the Top 25.
Even if the figures may differ, due to illegal trafficking among other things, all the figures highlight the fact that the cannabis industry represents one of the most promising markets. It could reach its peak growth in 2030 with an estimated growth of 20% explained by the authorization of the recreational use of the substance.
Also read: The legislation of the culture in Morocco (weed-info.fr)
Canada, a forerunner of legislation is the richest place in the development of the sector. Indeed, the Toronto Stock Exchange gathers the majority of cannabis producers with more than 80 companies.
A developing market also means diversification for investors with the appearance of new emerging markets. According to an estimate by Brightfield Group, the legal cannabis market will reach a value of $22 billion per year from $600 million in 2018. This past year, major companies have begun to make their mark on the CBD market. Heineken, for example, has released CBD sparkling waters, as has Coca-Cola, which is exploring a drink. Carl's Jr. is testing a CBD-based burger in Colorado and Target has had CBD products on its shelves since 2021 as have Walmart and Amazon.
The evolution of the market is currently based on speculation, so it's a matter of being vigilant about investment choices. A race between companies positioning themselves on the market is foreseeable. Thus, an increase in production is to come followed by an increase in competitiveness. Only the most competitive and profitable companies will be in a position to defend their market share. As a result, investors will see their dividends increase.
It is imperative to remain aware of the instability of the market. There is a real legislative risk that could be a drag on this market. If the states where cannabis is legal have many problems such as an increase in delinquency or traffic accidents, a re-penalization is possible.
To invest in cannabis, there is an index of companies in the sector called "Marijuana Index". A list of companies involved in the cannabis sector can be found on their website. The acquisition of shares of companies is accessible through a securities account. It is thus interesting to invest in this field in full expansion and evolution.