The volatility being experienced in the stock market as a result of the Coronavirus has clearly been a concern for investors both large and small as they look for a place to invest their financial resources. This means many are thinking outside of the typical long-term blue chip investments that many would include in their portfolio. One of those investment sectors has become possible marijuana holdings. While the development of the deadly virus has practically shut down the U.S. economy, it has had little to do with sales of some products that people use daily. In fact, most of those who are authorized to use medical marijuana make it a necessity for their daily routine. Medical applications alone will be enough to support the industry status quo, and now could be an excellent time to buy into what will become a much larger market in the future as legalization rolls out.

 

Benefits of Marijuana Investing

Investing in marijuana is a relatively new phenomena in the stock market, and there are still many professional investors who do not generally advise the purchase. The problem with this is that the Covid-19 impact on the market has been enough to force all investors to reevaluate their holdings. Even a reasonably small percentage of total investment assets may be a good decision because the industry is poised for major growth once the federal ban is lifted on cannabis containing THC. However, the investment professionals are correct in recommending purchases be made through the Nasdaq or NYSE because the companies have been intensely scrutinized and the major players have been the ones actually generating a profit for stockholders. They stress that knowing how to invest in marijuana is vital in avoiding possible losses that could happen with over-the-counter low-value stock options.

 

Legalization Will Be the Key

Authorization for recreational use with no potential criminal consequences will cause the marijuana market to boom, which in turn will increase the value of stocks in this sector. The benefits at this point are mostly long-term growth potential, but that does not mean that some specific established marijuana stocks will not yield good results in the short run. Few investment sectors have this obvious ongoing upside potential. The primary reason many states have not addressed authorization of marijuana in any form is because of the federal ban on THC products. All states in the U.S. are strapped financially, and many will enact some type of recreational authorization that will allow lawful sales and consumption that will fuel market sector growth. Waiting until after legalization could mean a reduction in earning potential, as it is always best to invest ahead of the incline curve in any market.

 

Canadian Company Investment

Canada is a solid example of what will happen when the United States finally lifts the federal ban on marijuana. While the country has authorized recreational use a few years back, the industry is just now set to take off as companies within the supply chain build in stock value and operational cash flow. The demand is in place, which will also be the situation in the U.S. as states set their jurisdictional laws. Canadian stocks may actually be a good place to begin because opening up the U.S. means that their companies have a head start for initial demand on the market. But, that does not mean that certain marijuana production companies and outlets are not already building value due to the broad application of medical marijuana usage. And investment in cannabis can also include the variety of CBD products already on the market, not to mention the potential uses of industrial hemp.

Just as in any other emerging market, it is always best to invest before the boom for maximum financial growth. And it is not necessary to be educated in understanding the product completely. The point is to invest wisely in a market that is set to grow exponentially as governments in North America wake up to the fact that this could be a serious tax income generator for their states.