Whoever said “money doesn’t grow on trees” clearly wasn’t a stoner or a stock broker. The US market for legal cannabis grew from $1.5 billion in 2013 to $2.7 billion in 2014 making it the fastest growing industry in the U.S. according to findings from a ArcView Group market research study published in 2015. The report predicts that legal marijuana sales will generate as much as $21.8 billion by 2020. As a result, cannabis is arguably the best aggressive growth opportunity the market currently has to offer!
However, the risks of investing in marijuana stocks are much higher than the potential payoffs. The marijuana composite index is very volatile primarily because cannabis is still federally illegal. The volatility is also due to “novice investors who are flooding into the stocks on the promise that they’ll find riches with the decriminalization/legalization of marijuana,” according to Simon Burns, an Openfolio representative. Some experts still suggest however that the time to buy marijuana stocks is now before the barriers to entry become too high. This post will cover everything you need to know about the high potential returns of marijuana stocks, the Securities and Exchange Commission (SEC)’s warnings about cannabusiness scams and how to begin investing in the marijuana penny stocks.