CANNAINVESTOR Magazine November / December 2016 - Page 97

Do Investors Have the Drive to Weather the Cannabis Storm?

By Celeste Miranda, The Cannabis Marketing Lab

In a monumental vote for cannabis, four states went recreational and four went medical which could finally prompt change in the federal structure of the plant. As with everything in the industry at the moment going live with a cannabis venture is a bit touch and go. Despite the ambiguous nature of legislation the legal cannabis industry has reached $7.4 billion and is projected to reach $20.6 billion by 2020. With these kind of numbers it is easy to still find the drive to get involved in the cannabis stock trade. To stay in touch with the market without overstepping and losing capital take these few tips into account.

Understanding State Regulations

One of the main issues for those looking to get involved with the cannabis stock trade is that Canada and many other states in North America still have laws in place that define cannabis as illegal. Among the many issues that this brings is that companies utilizing marijuana cannot use water from a federal aquifer since the plant is still considered federally illegal. This is just one example of how a lack of investigation when starting a cannabis business could lead to a devastating end. When looking to invest in a new stock look into how guarded the brand is from police intervention. Do keep in mind that laws differ from state to state which makes it imperative that research is done into the laws in each state.

The state to state laws differ which makes it difficult but not impossible to expand across state lines which will hinder the scale and growth that we’re looking for when we invest in new stocks. There are various companies like Kiva Chocolates and Auntie Dolores edible line that have been able to expand across state lines but how they did it isn’t a clear cut process in the industry right now. In addition there are countless patent cases waiting at the U.S. Federal patent office that they just aren’t touching until the federal government decides that cannabis is legal.