Top Tips for Investing in the Cannabis Industry
You may have watched the rapid rise of the cannabis industry from the sidelines, and are now thinking about getting involved. This is the perfect time to invest. The relaxation of both medicinal and recreational cannabis laws across the US continues apace. You will notice when you browse the various cannabis job websites that there are many hundreds of opportunities for new entrants to get involved. But, as an investor, where is the best way to get a return on investment? Here is our advice.
Invest in Privately Held Companies Rather than Publicly Traded Cannabis Companies
Publicly traded cannabis companies, while often much bigger than privately held cannabis companies, are not the best use of your money, in our opinion. We feel that many publicly traded companies are not solid long-term investments and the likelihood of making a good return is slim. If you invest in a private company, you will be able to become an investor that is accredited. This ensures you stick to the SEC guidelines.
Who is at the Top? Research the Management Teams
Central to the success of any cannabis company is a talented management team. Sure, no matter what company you invest in, you should research who is running the show. But, researching who owns a cannabis company is especially important as you’d be surprised to find that a lot of these companies “got lucky” during the green rush and their owners are way out of their depth when it comes to future expansion and growth.
Top Tip – Avoid Investing in Companies that Deal Directly with Cannabis
There is such a large amount of regulation when it comes to companies who deal directly with cannabis. Even the slightest break of the rules and it could be curtains for the company and they could be shut down over night. To avoid this potential danger, we would recommend investing in ancillary companies. For example, next generation platforms which are specialist cannabis marketers are a great “bet”. These programs allow growers to sell their crop directly rather than having to go through a middle man. This is quite a lucrative area to get involved in.
What Companies are Taking on More Employees?
A quick browse of the cannabis jobs near me tool on Cannabis.net, and you will be able to see at a glance what cannabis companies are expanding, which can be gauged by the number of open job positions that they have at the company.