By Veronica Morgan
Did you know there is an entire new market on the stock exchange? The legalization of medicinal and recreational cannabis has resulted in a burgeoning marketplace for investors, hoping to cash-in on the growth potential of a previously untapped industry.
Some experts are comparing what they call the “Green Rush” to the dotcom boom more than a decade ago.
Exchange Traded Funds (ETF’s) are considered a marketable security, similar to bonds, commodities or an index fund offering a variety of assets in one bundle. ETF’s are different to mutual funds, and profit and loss changes occur throughout the day, like regular stocks on the exchange.
Before you rush off to invest all your money, you should be aware of a few things. Many banks are still refusing service to customers who deal primarily in cash. A new senate bill may change that, but at this time, the federal government can seize assets from the marijuana related industry.
With vague guidelines, and with virtually no paper trail, the cash trade makes investing a bit more risky.
Some companies have mastered the legalities and are producing legitimate stock on the Over the Counter market as OTCQB securities. In order to trade OTCQB’s brokers must be registered with the Financial Industry Regulatory Authority (FINRA) and with the Securities Exchange Commission (SEC).
Legitimate investments can be made with minimal financial contribution. Penny stock, small foreign issuers and shell companies all trade on the OTCQB. The market is ripe for new investors, who may not have huge amounts to invest.
MassRoots (OTCQB: MSRT) is a very popular stock, organized by a social network of the Cannabis community. There are several legitimate stocks eager for investors. The market does not only feature the plant and its by-products, but includes miscellaneous items such as grow lamps, specialized fertilizers, watering equipment, smoking devices and more.
Be aware, however, that there are many more sketchy deals out there, trolling for your dollars. Nick Hodge, Founder & Managing Editor for Outsider Club, warns about “pump and dump scams” in his report, Marijuana Stocks: Investing Without Getting Burned.
If you are interested in investing in the cannabis industry, be sure to do your own homework first. There are more than 7.5 million daily tokers and as many as 50 million occasional or casual users in the US today. Projections show a potential for $35-$45 billion dollars a year in profits, but there are only a handful of trustworthy stock options.
As the push for legalization spreads, more opportunities will open up for lawful profits. In the meantime, common sense, and a bit of research will help would-be investors find the stock for them.