Fresh cannabis leaves

Many people are curious as to why cannabis seems to be the in thing today. Some tend to shy away because of the stigma attached to it brought forth by some ancient practitioners. Today, the playing field has leveled and society has slowly started embracing the reality that cannabis isn’t that bad after all. In fact, the proven medicinal and health benefits this plant offers has driven a steadily increasing demand for it all over the world. And yes, there is no stopping cannabis from overtaking other “stable” industries in a matter of years. This is why there are a number of prudent investors who have taken that giant leap and have started the shift towards investing in cannabis. If you know of somebody who has already done so, then perhaps an in-depth look as to why you should also invest in cannabis is what you need right now.

It is Hands Down Profitable

Yes, before you would be considering other factors of your investment, you would always be asking the primary question – “Is it profitable?” The answer to this is a resounding “Yes!” Statistics has shown that cannabis is the fastest growing industry today in the world markets, with higher and faster return on investment than any other sector. This is the answer to a common concern of investors, which is the period that they have to wait before they see a return on investment. With a short “waiting time,” investing in the cannabis industry makes it more viable than others.

You Can Pool Resources

Moshe Dovid Gold (left) and Andrew Smith

Another common concern of many investors is the initial investment that they would make. The funding requirement for a cannabis startup is not fixed. This means that it could vary from one project to another. An estimated project cost could run anywhere from $10M to $200M USD. Factors that would affect this figure would be the size and scope of the project, as well as the cost by location, water, electric, and workforce. Don’t get shaken by the millions because the 10 or 20 million will not be coming solely from your own pocket. You can always pool resources and as the old saying goes, “the more the merrier.”

Breaking the Barriers

Another common concern is whether it would be possible for investors living in countries where cannabis is considered illegal to invest in cannabis startups located in cannabis-friendly countries. This is possible but of course, it comes with some exceptions. There are a few countries where it is not permitted. These are few and as the industry is becoming more accepted by societies, this number is also becoming fewer. Even in the United States of America, it’s now accepted, unless you are a board member of a national bank, or if you work directly for the US government. If you do not belong to these few exceptions, then you’re good to start with your investment.

Take Note of the Risks

Yes, in all investments, there are risks. The cannabis industry is no different. However, these risks are always calculated and two ways that one can avert this is by having the right team in place, and having a solid plan. In some places like the USA, the risks are greater because it is legal in some states, but not by the Federal government. According to Andrew Smith, CEO of South Pacific Cannabis, Ltd., choosing where you invest in would play a very important factor in mitigating the risk. In his experience, he has handpicked Vanuatu as a very good place to start investing in cannabis.

The Early Bird Gets the Worm

Andrew Smith of Tafea Industries

Cliché as it may sound, this adage holds true when it comes to investing in the cannabis industry. Some worry that now might be too early, when in fact it isn’t. A year or two from now, when others have come to realize how profitable this industry really is, they would still be looking for a good location, while you are already having a hard time committing to customers because of an overwhelming demand. Yes, at this point one could say that the industry is young and growing; however, most things are becoming established. Suffice to say, it’s more like in the middle but soon most investors will be priced out of the market, as farms and facilities will be taken over by Large Agra and Big Pharma.

Don’t Forget Taxes and Legalities

To set expectations, taxes on cannabis vary greatly from one jurisdiction to another. The taxes levied on cannabis products whether for export or local market can range anywhere from 15% to 25% on the average. As to the legal aspect, if you invest in legal projects found in countries that provide proper licensing, then you should be good. In fact, taxes and legalities aren’t considered as the major obstacle hounding the cannabis industry, it is overcoming old and false stigmas that are considered as really tough to contend with!

Knowing the Product

Keep in mind that cannabis by-products considered as the most profitable include high-grade medical cannabis flower, edibles and extracts. Once you have already started with your investment and have come to enjoy some profit, take note that banks accept financial transactions involving proceeds from cannabis. What was once a contentious issue has been resolved in most places. In the USA, it is on a state by state basis.

Trading Cannabis

There are cannabis producing, marketing, or retailing companies currently listed on the stock market. Exchanges in Canada, Australia, USA, and a lot more have a list of these companies.

Here is a short sampling of the many cannabis related companies trading on the world’s financial exchanges:

Australia

AusCann Group Holdings Ltd. (ASX:AC8)

BOD Australia Ltd. (ASX:BDA)

Botanix Pharmaceuticals Ltd. (ASX:BOT)

Cann Group Ltd. (ASX:CAN)

Canada

Abattis Bioceuticals Corp. (CSE:ATT)

Affinor Growers Inc. (CSE:AFI) Benchmark Botanics Inc. (CSE:BBT)

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