The cannabis industry is hotter than ever. Investments have already surpassed $3 billion this year, Viridian Capital Advisors estimates. And, according to New Frontier Data, sales are expected to exceed $9.5 billion in 2018.

Retail investors must do their due diligence. Though it's laborious and time-consuming, most people usually don’t have access to the resources needed to make an informed assessment of a company. But there are options and workarounds to help new investors pull a seat up to the table. 

One way is to invest in ETFs: they make it easy to invest in cannabis stocks that have already been pre-selected by teams of analysts who’ve conducted the necessary due diligence and decided to include certain companies in these ETFs. Another option is to look to investment advisors and stock pickers who have a track record of reliable insights on which stocks are overvalued and which ones deserve your attention. 

We’d like to also impart the following four rules for new marijuana investors. 


#1: Time spent researching is a good investment

To take the financial temperature of the company, check the filings and other documents required by regulatory agencies, like Health Canada, as well as third-party publications. 


#2: Don't overspend

Never put in more money than you can afford to lose. Strong returns are not your birthright, and cannabis stocks are volatile and sometimes unpredictable.


#3: Set a timeline

Creating standards around when to buy and when to sell are crucial because when you're in the middle of gaining or losing returns, emotionally-driven decisions are less informed ones. 

Your rule might look like this: “if the stock falls below X or surges above Y, I’ll sell.”


#4: Explore both broker options

Brick and mortar brokers are reliable, but online brokers can be incredibly enticing for their sophistication. A word of warning that online stock brokers run the risk of being overwhelmed at precisely the wrong times—when a market-related event has investors excitedly buying or selling. 


And remember that investing in cannabis is not limited to growers or retailers. There are plenty of fiscally-attractive, powerful companies providing ancillary services to the industry, some of whom used to operate outside the marijuana industry. For example, a company such as Scotts Miracle Grow is now considered a cannabis stock.

  Posted: Saturday, May 26th, 6:46pm 6 months ago
Profile PictureWritten By: Parker Wallace

Parker is a cannabis enthusiast to the core who shares a keen interest in listening to what others have to say and understanding what’s important to them. Those who know Parker know that his passion for health and wellness runs deep, and his love of Canada even deeper!

Roottie keeps me up to date on all things cannabis. From new uses for CBD to opportunities that affect my business, Roottie is my source. Roottie provides informative and entertaining information that is up to date and accessible. -Karla Watson - Tact HR Services

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