The marijuana industry is poised for significant growth and investors are taking notice. It used to be seen as a very risky industry but things are looking up. One study predicted that legal worldwide sales could reach 16.9 billion in 2019. It’s no wonder everyone from individuals to private equity firms is looking to get in on the action. If you’re looking for an investment opportunity, here are five reasons you should think about having marijuana stock in your portfolio.

Legalisation is Increasing Across the World

Many US states are officially approving cannabis for recreational and medical usage. Though the drug remains illegal at the federal level, the majority of states have given medical marijuana the green light. In addition, Canada and Uruguay went as far as legalising recreational marijuana and other countries could make similar adjustments to their laws this year. This means the industry could expand significantly.




There are Options for Investment

If you choose to invest in cannabis, you can purchase shares in companies which are publicly-traded. They may be growers, distributors, medical marijuana dispensaries or other types of cannabis-related businesses. The other option is to invest in an Exchange-Traded Fund which offers exposure to many of the major players. ETFs give you an opportunity to invest in several stocks without having to hand pick them.

Medical Marijuana Offers Advantages

Medical marijuana users are more likely to use a variety of cannabis products and spend more on them. Patients who are prescribed marijuana tend to use it every day while most recreational users partake less often.  If you invest in medical marijuana, you can expect the company to have more consistent cash flow. In addition, while recreational users tend to smoke cannabis, medical users prefer oils, edibles, concentrates, and other alternative products, again providing more varied opportunities for returns.

Cannabis is Emerging as An Alternative to Alcohol

The legalization of cannabis has been linked to a reduction in alcohol use. In response, some beverage companies are looking to diversify their offerings to include marijuana-based drinks. In fact, it is expected that most global alcohol companies are going to try to make some investments in this area. This opens up more opportunities for you to participate in a growing industry.

There Are Several Ancillary Businesses Ripe for Investment

You are not limited to investing in growers, dispensaries and processors. There may be opportunities in a range of spin-off businesses including hydroponics equipment manufacturers, packaging suppliers, gardening product suppliers, real estate, and lifestyle apparel. As you can see, the industry is much larger than you may think initially.

You can acquire marijuana stocks from most major brokers. Whether or not they are readily available may depend on if they are over-the-counter stocks or they are listed on a major exchange. Ensure you do your due diligence as you would with any other type of investment. Even though the cannabis industry is clearly growing, it still carries risks. You should not invest more than you would be willing to lose and you should expect the usual ups and downs of investment.

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