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4 Ways to Invest in the Growing Cannabis Industry
Jul, 2022 by Cannabiz Wholesaler
The cannabis industry is growing quickly, with plenty of opportunity for new investors still to get in on the ground floor of innovative companies. No matter your financial situation or how much risk you’re comfortable with, there is an option on this list that will work for any potential investor. Note: While we’ve compiled the best advice we can find on investing, it’s best to do your own research and/or speak with a trusted advisor before making any investment decisions.
Individual Stocks
Cannabis is on the stock market! Just like you can buy stock in Apple (AAPL), Target (TGT), or Harley Davidson (HOG), you can buy stock in cannabis companies. You’ll likely recognize some of the biggest names at the dispensary on the stock exchange. US News recommends stocks like Trulieve Cannabis Corp. (TCNNF), Green Thumb Industries Inc. (GTBIF), Curaleaf Holdings Inc. (CURLF) and Cresco Labs Inc. (CRLBF) as strong players for 2022.
Additionally, Jushi Holdings Inc. (JUSHF), Ayr Wellness Inc. (AYRWF), TILT Holdings Inc. (TLLTF) and Planet 13 Holdings Inc. (PLNHF) are great smaller cannabis companies on the stock market to invest in.
Two cannabis-related businesses’ stocks to consider are AFC Gamma Inc. (AFCG) and Northern Lights Acquisition Corp. (NLIT). AFC Gamma Inc. provides high-quality institutional loans to cannabis businesses. Similarly, Northern Lights includes banking services for cannabis brands, as well as a diversified portfolio of other holdings. In February of 2022, Northern Lights acquired Safe Harbor, the leading provider of financial services and banking solutions to cannabis businesses. Due to the mixed legality of cannabis in the US and globally, finance and banking companies are few and far between and therefore very valuable. Not sure where to start? Stock trading apps like Stash offer retail investors (a name for the average investor) an easy way to manage their investments and track changes in the market. Other apps include Cash App, Robinhood, and Ellevest – try a few out and see which works for you! If you have a larger portfolio or you’re looking to invest your retirement, its recommended to seek out a wealth management company or brokerage.
The cannabis industry is growing quickly, with plenty of opportunity for new investors still to get in on the ground floor of innovative companies. No matter your financial situation or how much risk you’re comfortable with, there is an option on this list that will work for any potential investor. Note: While we’ve compiled the best advice we can find on investing, it’s best to do your own research and/or speak with a trusted advisor before making any investment decisions. Individual Stocks Cannabis is on the stock market! Just like you can buy stock in Apple (AAPL), Target (TGT), or Harley Davidson (HOG), you can buy stock in cannabis companies. You’ll likely recognize some of the biggest names at the dispensary on the stock exchange. US News recommends stocks like Trulieve Cannabis Corp. (TCNNF), Green Thumb Industries Inc. (GTBIF), Curaleaf Holdings Inc. (CURLF) and Cresco Labs Inc. (CRLBF) as strong players for 2022. Additionally, Jushi Holdings Inc. (JUSHF), Ayr Wellness Inc. (AYRWF), TILT Holdings Inc. (TLLTF) and Planet 13 Holdings Inc. (PLNHF) are great smaller cannabis companies on the stock market to invest in.
Two cannabis-related businesses’ stocks to consider are AFC Gamma Inc. (AFCG) and Northern Lights Acquisition Corp. (NLIT). AFC Gamma Inc. provides high-quality institutional loans to cannabis businesses. Similarly, Northern Lights includes banking services for cannabis brands, as well as a diversified portfolio of other holdings. In February of 2022, Northern Lights acquired Safe Harbor, the leading provider of financial services and banking solutions to cannabis businesses. Due to the mixed legality of cannabis in the US and globally, finance and banking companies are few and far between and therefore very valuable.
Not sure where to start? Stock trading apps like Stash offer retail investors (a name for the average investor) an easy way to manage their investments and track changes in the market. Other apps include Cash App, Robinhood, and Ellevest – try a few out and see which works for you! If you have a larger portfolio or you’re looking to invest your retirement, its recommended to seek out a wealth management company or brokerage.
ETFs
Exchange-Traded Funds or ETFs are a way to invest in an industry without putting all of your investment into one specific company. Similar to mutual funds, which allow investors to pool their money and invest in a diverse portfolio, ETFs allow investors to buy a small segment of an industry by investing a small amount into multiple companies that are apart of the same industry. This way you can reap the benefit from a growing industry without worrying about a specific company’s volatility. These are generally lower risk investments than a specific stock, but the returns will be lower if only one company experiences significant growth. Generally, you’ll want to park your money here and let it ride out any speed bumps in the market for longterm growth.
US News recommends AdvisorShares Pure U.S. Cannabis ETF (MSOS), Global X Cannabis ETF (POTX), AdvisorShares Pure Cannabis ETF (YOLO), Amplify Seymour Cannabis ETF (CNBS), Cambria Cannabis ETF (TOKE), Alternative Harvest (MJ), U.S. Alternative Harvest ETF (MJUS), and The Cannabis ETF (THCX). Like individual stocks, you can find ETFs on trading apps like Stash, Robinhood, etc. Like before, its best to take larger portfolios to a trusted advisor at a wealth management company or brokerage.
Business Loans/Direct Investing
If you want to be an angel for a small start-up or be more directly involved with a company’s growth, you can play cannabis-Shark Tank and invest your own capital. The position of Mr. Wonderful or Mark Cuban of Cannabis is still open! If you have larger amounts to invest, talking hundreds of thousands or more, there are growing cannabis companies who will want a meeting with you. Whether you’re looking for a stake in the company or loan paid with interest, there are opportunities out there for big name investors. While many of these will come through networking and word of mouth, you can often find companies through sites like Crunchbase, NewCannabisVentures.com, InvestInCannabis.io, and social media.
Additionally, business loan financers like GoKapital, Diamond Business Loans, and GUD Capital are always looking for investment partners to continue to lend to more and more cannabis businesses. This can be a more hands-off way to put your money directly into growing companies before they go public.
Unlike stock trading, direct investments and business loans are riskier and generally have a higher investment amount that’s expected. This is not for the casual investor, but a true cannabis capitalist looking to maximize their return on investment while understanding the higher risk involved.
Crowdfunding/Community Lending
Every company starts somewhere. For many, its on platforms like IndieGogo, Kickstarter, Kiva, or one of the many platforms for crowdfunding or community lending. In crowdfunding, every campaign and their incentives are different. Due to the mixed legality of cannabis, you’re more likely to be investing in cannabis-adjacent businesses like accessory brands, artistic projects, or other groups that likely are not directly growing and selling cannabis. This option is also probably the lowest demanding and lowest risk option, but arguably with the lowest return. Usually the return on your investment will be material rather than financial and can range anywhere from just a “Thank you!” to a product the business produces.
Or, if you’d rather invest but still love the idea of supporting a small business, try the website Kiva! Kiva allows individuals to make microloans towards community lending projects around the world, including the US. There is a small return on your investment paid over time that the site encourages users to reinvest into more community projects, but users do have the option to withdraw their earnings, too. While there are currently no cannabis-specific loans on the platform due to Kiva prohibiting loans for businesses that are ”illegal in the borrower’s country or violate major UN conventions,” there are “Lending Teams,” or groups of Kiva investors like “Hemp Out” that all believe in cannabis legalization and lend to projects on the platform hemp- and cannabis-related and unrelated.
If your investment goals are more altruistic than financially motivated, crowdfunding and community lending projects will check all of your humanitarian boxes and make your heart happy.
Whether you have a lot to lend or a little, want a quick return or to ride the waves of the market, or you consider yourself a cannabis capitalist or carry your ideals into your investment portfolio – there is an investment option for you in cannabis and hemp. The industry is only continuing to boom, so invest now to watch your money grow!