What To Know About Investing In Marijuana Post-Election

(SALEM, Ore.) - Marijuana and its legalization remain controversial in the eyes of many people in the U.S., but initiatives are moving forward in many states to make it legal and accessible regardless.

Investors have been eyeing marijuana-related stocks and investment opportunities for quite some time, particularly considering 25 states and the District of Columbia have legalized the possession and distribution of medical marijuana.

After the November election, four states also decided to add themselves to the list of locations where the use, sale, and consumption of recreational marijuana are legal. These states include California, Nevada, Maine, and Massachusetts.

Despite the increasing support for both medical and recreational marijuana throughout the U.S., the election of Trump as the next U.S. president has some investors nervous as to the future, and unsure of where they should be putting their money.

The Marijuana Market

According to ArcView Market Research, which is a research firm focusing on cannabis, that’s based in San Francisco, the legal marijuana market is expected to reach sales of $20.6 billion by 2020. It’s valued at around $7.4 billion currently. This would be a staggering 29% growth rate.

The New York Stock Exchange

News just broke in media outlets like Forbes that The New York Stock Exchange has approved the IPO of Innovative Industrial Properties. This is a real estate investment trust that plans to invest in medical marijuana property. Despite this big announcement, there remain concerns that since marijuana is still federally illegal, and is likely to stay that way, the NYSE is breaking its own regulations that dictate it can’t list legally non-compliant companies.

The Donald Trump Presidency

As mentioned, there has been some concern about the impact the Donald Trump presidency could have on marijuana sales and legalization, although most analysts say it’s still a good place to invest. In general, Trump tends to take a much softer approach to the idea of marijuana and its legalization than many other conservative lawmakers. He’s given interviews where he’s even said he’s completely for medical marijuana and feels it has the potential to help people.

Many investors and analysts are betting on the fact that his presidency won’t deter the growth of marijuana market, particularly with recently passed state initiatives.

OTC Trades

What people who are considering investing in marijuana should know is that aside from the NYSE approval of Innovative Industrial Properties, most marijuana companies are still risky and are traded over-the-counter.

If you’re an investor who wants to take advantage of opportunities in this unique market, it can be a good idea to research how to trade penny stocks, so you understand how this particular area of investing works.

Even some companies that don’t actually deal directly with the sale of marijuana but are indirectly related have been rejected from listings on the stock exchanges, but that means there remain exceptional OTC trading opportunities. The SEC warns investors to be vigilant when it comes to choosing the marijuana companies they invest in, but that doesn’t mean there aren’t great opportunities for investors willing to take a chance.