Will The Stock Value of CBD and Cannabis Rise or Fall?
Investment in Cannabis and CBD oil have increased in the last few years, spurred mainly by the recent legalisation of medicinal cannabis in many countries. This new legislation is being shaped by new research and data. The research being carried out looking into the medicinal uses of Cannabis is changing long held notions against Cannabis and its related products.
Overcoming The Stigma
For years, Cannabis was seen as an addictive drug that acted as a gateway drug for many who consumed it. It was mainly this addictive property and the “high” state one got after consuming it that cannabis was grouped together with substances like meth, ecstasy and recreational drugs.
While it is true that Cannabis is a psychoactive drug, the notion that it is harmful or a gateway drug has been debunked as false. Cannabis does produce a state of being “high” but research has now proven that it is not as addictive as other recreational drugs. The addictive nature of cannabis is like that of alcohol and cigarettes. Alcohol and cigarettes are not seen as gateway drugs, even though some people do get addicted to them, similarly Cannabis induced a state of being high but it has now been proven that it is not a gateway drug. Infact research has also proven that many who consume Cannabis, to get to that state of being high, end up not progressing to other recreational drugs at all.
Far from being a recreational drug that results in deterioration of health and mental capacity, new research suggests that Cannabis can be used to treat crippling medical conditions that previously were difficult to treat.
Cannabis based medicinal products have been found helpful in treating patients with chronic depression, stress and anxiety. Hemp oil has been found to relax the nerves, people get before big events. Not just this but cannabis is the only thing that has helped children diagnosed with Dravet’s syndrome, which is a debilitating form of epilepsy prevalent in children. Initial research also suggests that cannabis can be used in the treatment of cancer, it is of particular help for patients going through chemotherapy.
This is the data that has prompted governments to legalise Cannabis, the stigma of Cannabis as a harmful drug is breaking and this is good news for those interested in investing in Cannabis and CBD.
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How To Invest
The cannabis and CBD market is a nascent market or industry and therefore a lot of investors simply do not have the required knowledge and expertise to make informed investment decisions. The first thing therefore, that is needed is that investors should carry out adequate research before investing even a dollar.
This market or industry is new and very complex in nature. An investor needs to know what they want to invest in. For this the investor, firstly needs to have their investment objective very clear. What are the short and long term goals, what is the expected rate of return etc. Once these objectives are clear, the investor will then need to look at options of investment in this industry.
Some investors seek investment in the shares of companies that are developing cannabis based medicinal products, whereas some investors seek a more direct role by purchasing licenses to set up their own research labs. This therefore is a very complex set up and it is advised to take first and second opinions from an investment advisor well versed in the workings of the medicinal cannabis industry.
Why Invest In Cannabis And CBD?
This is the best time to invest in the legalised Cannabis industry. Why? Simply because new research is shedding more light on the uses of Cannabis and countries are now starting to legalise it. The USA, Canada and UK were the first one to do it. Australia is preparing the groundwork to set up the infrastructure before legalising it. Even Pakistan is on the path of legalising cannabis in order to set up research and development facilities.
The interest right now is still in its early stages and as time passses one, one can only expect this interest and public demand for cannabis based medicinal products to increase. Investing into this industry right now is cheaper in terms of the return on investment. The industry is expected to go into a growth and then boom stage in the coming years. The investors who invest right now, will in future experience exponential returns.
Think of this like Bitcoin. It was launched in 2008-9 and for almost 10 years, the cryptocurrency market showed a lukewarm response. Those who had invested early on, held their investment with patience and then came 2017-18 when the Bitcoin boom happened. The crypto currency spiked from $300 to $18000 in a single year.
This is how new industries and markets develop. For the initial period of a few years, they show lukewarm response just like the legalised Cannabis industry is showing right now and then a trigger event triggers boom that results in mass awareness in the consumers, which leads to spikes in demand that drive up prices, thereby also driving up profits for the investors.
The legalised cannabis industry, at present is at some distance from this expected boom. Investors therefore should be looking at long term gains, by investing and then holding their investments in the long term to benefit from exponentially increasing returns.
Potential For Growth
This market has got immense potential for growth. Bulk of the research so far has been on medicinal uses but this is not the only way in which cannabis can be used. Cannabis has got dozens of uses that are not medicinal. Hemp oil has got a plethora of uses, the number of industries that can become connected with legalised cannabis is staggering.
For example, cannabis based products can be used in
- Renewable fuel
- Biodegradable materials
- Paper industry
- Alternative for oil based plastics
It is for this reason, that the future of the legalised cannabis industry is bright. Investors interested in this area, need to carefully study this industry before making any investment. One key point to remember would be to aim at the long term gains, as the industry is still in its early stages and needs time to develop the infrastructure, supply and logistics chain to get into the growth and boom stage, that will eventually deliver exponential profits.
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