Are marijuana stocks worth getting into in 2019? In recent times, there has been a huge explosion surrounding the interest in these stocks, including medicinal marijuana stocks, spiking and massive hike and their price and value recently. However, this sudden interest is not unwarranted.
The reasons for this include the recent changes in legalities surrounding the substance, for example, Canada’s recent legalization of marijuana. Canada however is not the only place to have legalised marijuana, many states also have – the reasons for legalisation are varied with some for medicinal, and some for both medicinal and leisure use. Regardless of the reasons for the recent more widespread legalisation of marijuana and marijuana related products, it has meant that more people are now open to the idea of the substance’s acceptance, and are beginning to see the positives behind it’s legalisation.
There are also a lot of other states in the United States of America that are now considering the legalization of marijuana, with a number of these suggesting it be added as a voting option in order to gain a greater opinion. Millions of Americans live in a state that allows marijuana.
The fact that marijuana is becoming more legal in more and more places all the time, it has caused the stocks to become more popular, with people seeing that the industry has great potential. More and more companies that are associated with marijuana are now becoming more stood on various stock exchanges, and the industry is starting to receive more funding as well. Marijuana has started to receive a mass of support in every way, in the eyes of the law, what society thinks of it, and how people view the drug in general when compared against how they used to.
Marijuana stocks have it treated some massive profits during a recent years as a result of these new views amongst other factors. Before you invest in marijuana stocks, you should be sure to make yourself aware of a number of points surrounding the industry and it’s stocks, as well as what to look for in marijuana stocks before you make the decision to invest.
As with any other stocks or investment that you are considering making, it is always a good idea to lean a bit about the industry and how it has developed in the recent years before you make your investment. If you have knowledge on the industry and good and bad things that can happen within it, then it can allow you to make more sense of the news surrounding the stocks that you might interpret and those that should influence your decision on which ones to purchase.
There are different areas of the marijuana industry that you might want to consider investing in, with some more lucrative than others. One could invest in the initial step of the marijuana process which is those that produce the marijuana – the growers. These are companies that sell the raw product – as long as marijuana is used by people, this step of the process will be essential and therefore most likely a relatively reliable investment. It is also important to remember that investing in marijuana stocks is not massively different from any other stocks in what should be considered – the same rules still apply. You should research the company as you would with any other, ensure that they have a good management structure and that the company has a positive track record. This point about positive track record however can be difficult to obtain, or more difficult to obtain one should say in an industry such as marijuana as it is a relatively new and has only recently became legal. This means that any companies that have been operating before the legalisation of marijuana was passed would most likely not have been keeping genuine records as to their companies successes.
But, with the ever-growing nature of marijuana stocks and the industry itself, it is not likely that the stocks for it will slow down or cause one to lose their investment unless they happen to make an extremely bad decision.
However, as is the nature of purchasing any stocks there is always an element of risk. The risks with marijuana stocks are arguably even more so than those with other normal stocks. Another point to consider is that a large amount of companies that are operating in the marijuana sector are not yet making profit. This means that in order to raise a respectable capital they must continually issue new stocks in order to do so. This, as you will know if you are an experienced trader, results in the dilution of those shares that already exist. Dilution is not a good thing as it can drastically reduce the value of your holding compared to what your holding was worth before the new shares issuance. It is also important to consider that with the new nature of marijuana stocks, excitement is high and the stock prices at present reflect this. Should the industry not grow as its current investors expect, the stock prices of the industry could drop massively which would have detrimental effects on the finances of those that hold large amounts of stock before this happens.
All of this information poses the final question – should or should you not invest in marijuana stocks in 2019? This of course, is a matter of whether you are willing to take a risk or not. Currently, stocks in the marijuana industry are a high risk but can also provide a very high return, but then again, they might not! Should you choose to invest in marijuana stocks in 2019, one of the most important things to consider it is not to sink all of your available capital into one stock – should the company not pull through, you will be at a massive loss.
When investing in marijuana stocks, it is a good idea to spread out this year’s that you buy in small amounts – this can allow you to examine more closely what is happening and how successful each of them may be.