Several investors have been looking to benefit from the marijuana market for the last couple of years. From recent data, it is predicted to develop at least 25% annually before 2030. Moreover, as different nations legalize cannabis and its components worldwide, the prospects for entrepreneurs and current businesses continue to expand.
However, like with any new product in an industry, there are several investing hazards. Just like how you buy Bitcoin on paybis.com with risks in the cryptocurrency market, buying marijuana stocks involves its risks.
Hence, it pays to grasp how its market operates, whether you’re a professional or a newbie investor. This guide will rapidly get you up to speed, and it covers the best marijuana stock selections.
How to Invest in Marijuana Stocks
People can invest in the marijuana market by purchasing the stock of companies holding it. Learning what marijuana stocks to invest in takes plenty of research. But before we get into that, let’s categorize the companies that operate in the cannabis industry. They generally fall into three categories, and they are:
- Marijuana farmers and sellers
- Marijuana-based biotechnology companies
- Secondary product and service providers
Investing in marijuana stocks is similar to investing in regular stocks. The equities are traded on U.S. stock exchanges and may be bought and sold through any well-known brokerage company. However, as we mentioned earlier, it is critical to conduct research before investing in marijuana stocks.
The first step to learning how to invest in marijuana stocks is to consider the company’s financial performance since its breakout. Its performance metrics should be well-researched and compared to competitors. Also, you can conduct such research through the financial statements submitted to the Securities and Exchange Commission.
Several financial experts advise restricting marijuana stocks to a tiny section of your entire portfolio, like with most alternative investments. However, as a rule, you should invest no more than 5% of your portfolio in non-traditional assets like marijuana and cryptocurrencies. The 95% should be focused on wider and more diverse index investments.
Best Marijuana Stocks to Buy in 2023
There are hundreds of marijuana stocks to select from in 2023. And as earlier mentioned, cannabis enterprises can be classified into three major sections. Some of the best marijuana stocks to buy and their companies on the market include:
- Cresco Labs
Cresco Labs is a company based in Chicago, Illinois, and it runs several retail cannabis outlets in popular states in the U.S. The company is the leading supplier of branded cannabis products in the United States, and it’s rapidly undergoing expansion.
This is possible through acquisitions and the development of additional retail locations. A good example is the impending acquisition of Columbia Care, which will make Cresco the largest operator in terms of revenue. - Green Thumb Industries
Green Thumb Industries is a massive multistate cannabis business in the United States. It manages over 70 retail cannabis outlets in at least 15 states within the United States. In addition, it has 17 production facilities and licenses to all its retail outlets. It offers one of the best nurse practitioner salary schemes to its staff.
The company has benefitted from great development in its home state since the legal marijuana market began in 2020. Green Thumb Industries is set to experience significant growth when cannabis markets develop in additional cities in the U.S. - Grow Generation
Grow Generation is another well-known supplier of marijuana and the biggest cannabis-related specialty retail chain. The revolution in the cannabis industry has fostered a rapid need for hydroponic supplies. These supplies grow plants in liquid nutrient solutions without soil. Grow Generation takes advantage of this demand and provides several marijuana supplies. They are a very exciting marijuana stock option. - Innovative Industrial Properties
Marijuana establishments in the U.S. find it difficult to acquire capital from financial institutions. This is because, at the federal level, marijuana is still considered illegal. Hence, companies like Innovative Industrial Properties help solve this capital shortage for start-up marijuana companies.
They achieve such financial aid via purchasing several properties owned and managed by medical cannabis operators. They then rent these properties back to the previous owners to make their activities legal.
The sale of properties by cannabis operators provides urgent capital and, in turn, offers a steady revenue for the corporation through lease agreements. As a result, innovative Industrial Properties have top marijuana stocks to claim with such a business model. - Jazz Pharmaceuticals
Jazz Pharmaceuticals is an Ireland-based pharmaceutical corporation. Recently they acquired the cannabis-focused biotech start-up G.W. Pharmaceuticals, which made them huge contenders in the marijuana market. Epidiolex, a drug manufactured by G.W. Pharmaceuticals, is the first cannabis-based pharmaceutical authorized by the U.S. Food and Drug Administration (FDA).
The drug is prescribed for two uncommon kinds of pediatric epilepsy and a tuberous sclerosis complex. The latter is a rare disorder when seemingly harmless tumors develop on various organs. Both conditions have been successfully managed with Epidiolex, and it has become a financial success, with sales of up to $658.3 million.
Just because marijuana is a modern sector with lots of potential for development doesn’t guarantee its success. However, if you possess a high-risk tolerance, marijuana stocks are your business type. The industry is still in its early stages, and the market opportunities are massive, especially with continued legalization across U.S. states.
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