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Ideally you want to make an investment in a company that is on a public exchange and adheres to the same standards of reporting that an investor deserves. This diversification can possibly help the company survive.ĭespite these risks, there are some ways to prudently go about investing in cannabis. Look for companies that aren’t relying on a break through. If there are hurdles or they fail, then the stock can fall. Some of these companies are looking to develop and distribute a hit cannabis drug. Even advertising is limited.īeware of One-Hit Pharmaceutical Companies Some companies might even have issues expanding since it is harder for them to secure financing.
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This is not only dangerous but cumbersome. Since many banks adhere to federal law many marijuana businesses have to deal in cash. The near-term future does not bode well for the industry either as the current Attorney General is anti-cannabis. It also means there is always the possibility that the federal government will intervene. Remaining federally illegal prohibits growth. All this results in many cannabis stocks being a risky investment. Moreover, low trading volume is another hallmark of penny stocks this means that there are less buyers and sellers on a given day which results in pricing issues.
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These companies are less regulated and there is less information made available to investors. Penny stocks do not trade on a public exchange like the Nasdaq or NYSE. In fact, investing in penny stocks is a great way to lose money. Investing in penny stocks (a stock that is less than $5 per share) is a risky and speculative way to publicly invest your money. Before you publicly invest in this growing sector it is important for you to know the current risks associated with it.
#Marijuana micro cap stocks how to#
Cannabis is a hot investment idea and many clients ask how to profit from it. The legal cannabis market is already a multi-billion-dollar industry that employs tens of thousands of people. Cannabis is now medically legal in most states and legal in a few including the one where most of my clients reside.