Cannabis Stocks: Is Now The Right Time To Invest?

Watch the news or browse social media, and suddenly cannabis is everywhere. With a global change in attitude, we are now seeing markets grow at an exponential rate, which means one thing for investors—vast potential for profit. The reality, however, is that cannabis stocks are not quite as straightforward as they may seem. Keep reading to find out more.

The Cannabis Industry Is Going Mainstream

Ok, so we may be a little ways off from strolling down the street with a joint in hand and some edibles under our arm, but mainstream attitude, and more importantly, legislation, is changing. Cannabis reform in both recreational and medical markets is at an all-time high. Canada has become one of only three countries in the world to completely legalise marijuana, while several states in the US and select European nations are not too far behind. If your interests are more focussed on financial success than spiritual enlightenment, the cannabis industry is a prime candidate.

Companies are now trading on a nationwide scale, with many establishing infrastructure globally. Add this to the recent company listings on the New York Stock Exchange (NYSE), and understandably the rapidly evolving cannabis market is experiencing some pretty wild fluctuations in value. While we wouldn’t intentionally downplay the success of the cannabis industry, the famous phrase “don’t believe the hype” springs to mind. That’s not because the hype isn’t real, but rather, the excitement of emerging markets creates somewhat of a bubble effect.

Invest Early, Or Play The Long Game?

There is no doubt that early investors are likely to benefit if they can capitalise on expanding businesses, but there is still a considerable number of variables that could turn an idyllic investment into a complete dud. This scenario is not unique to the cannabis industry. Ask any seasoned trader, and they will talk you through examples of the same phenomenon seen across numerous business sectors throughout history. A Canadian cannabis producer may have doubled its share price overnight, but can it sustain that kind of uptrend for the months and years ahead?

These factors don’t stop opportunity from being rife. If you can afford to put aside some unneeded capital in hopes of profiting from a company’s future ventures, now is as good a time as any. That is, as long as you can cut through the “bubble” of excitement and see which companies have a financial model that can ride out any future uncertainty. Your other option is to get in and get out quick, capitalising on the volatility of the market. A high-risk, high-reward strategy is likely to unsettle novice investors, but some tools can help.

Where Should Investors Start?

Fortunately, several companies have identified the need for dedicated cannabis trading information. Sites like cannabismarketcap.io list the trading information of the top hundred global cannabis companies. Additional data includes their market cap, share price, and the value variation over the last 30 days. By presenting information in a simple to understand format, it is an invaluable tool for both seasoned traders and first-time investors. This type of resource can remove the uncertainty surrounding the cannabis industry and support the process of making an informed investment decision.

Cannabis Stocks Are Still In Their Infancy

Even if we woke up tomorrow and the entire world had followed Canada’s example, not all cannabis companies would make the cut, or even turn a profit. That is a natural part of business markets, but it doesn’t mean that the cannabis industry should be avoided. Market volatility can be beneficial if played correctly, but you should never invest more than you can afford to lose.

What the cannabis industry needs now—more than ever—is time. Time to see cannabis share prices level out and time for full-year financials to be declared. There is no reason to avoid investing in start-up ventures, provided you are prepared to let investments mature over several years. Regardless of your level of experience, do your research, understand how a business operates, and in conjunction with Cannabis Market Cap, you might have a healthy return waiting for you.