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Advantages and disadvantages of investing in medical cannabis

2 min. reading
Cannabis / 16 June, 2021

Sofía R. Ustáriz Journalist

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Is investing in medical cannabis a good idea? Let’s explore some of the pros and cons of investing in medical cannabis, so you can decide if it’s the right option for you.

According to New Frontier Data’s Global Cannabis Report 2021, the cannabis industry moves more than 334 billion dollars around the world, between legal trade and illegal practices.

However, more and more countries are authorizing its use, especially for medicinal reasons, which has led to the production of more than 150 billion dollars in the legal market; in turn, an increase of 100 billion dollars is projected for 2024.

Is it a good idea to invest in medical cannabis? Let’s explore some of the advantages and disadvantages of investing in medical cannabis:

Cannabis: the potential of a growing industry

Cannabis: the potential of a growing industry

In the coming years there will be companies that manage to capture the cannabis market and become generators of income and a source of jobs, therefore, investors from all over the world have shown increasing interest in investing in the industry.

Advantages and disadvantages of investing in medical cannabis

Advantages of investing in medical cannabis

  • Variety of investment options: the medical cannabis market is wide, from its production, through secondary industries of tea, vapors, pills and food that focus on its active ingredient, THC, to its direct marketing to the consumer.

 

  • New, expanding market: as it is a relatively young market -due to its recent legalizations-, its continued expansion will benefit early investors in this industry to a greater extent.

 

Disadvantages of investing in cannabis for medical use

  • Risky market: its greatest advantage is also a potential disadvantage, since being a young market, it is difficult to predict the behavior of stock markets. In bull markets it has reached increases of 170%, but downturns could be just as important.

 

  • Legal obstacles: although the perception and legality of cannabis is increasing in terms of its positive considerations in society and for health, it is not legal to invest in cannabis in all countries. Therefore, it is very important that, in addition to a technical analysis for the investment, a fundamental analysis is carried out, including the legality of such investments in the countries where the investor is located.
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