CANNAINVESTOR Magazine January / February 2017 - Page 68

Retail Investor's Perspective

Diversification also addresses personal bias. For example, an investor may be 100% in support of medical marijuana yet 100% against recreational usage. Diversification can focus on the shares of companies that have zero exposure to the recreational usage of cannabis. The various eggs at the top of this article represent the various segments that can be invested in and I am sure you can think of more and within each egg are many subsectors. The legal Cannabis Industry provides a unique opportunity for the Retail Investor to diversify within the industry itself due to these many subsectors.

This industry is in its infancy and that attracts risk. The industry is undergoing continuous Ecoforming (such as the uncertain treatment it may receive by the new government) and that attracts risk. When that risk transforms itself into positive ROI, it is generally jaw dropping as evidenced by the many stocks with triple and quadruple digit ROIs during 2016. But many stocks drifted sideways if not downward. There is also the inherent risk of investing in companies that may be plagued by low volume. That risk can be somewhat mitigated by investing in one or more of the three companies listed on a major stock exchange: