Is It Time to Invest in the Cannabis Industry?

  • Editorial Team
  • June 22 2018
invest in cannabis

Alternative investments enthusiasts exhibit more confidence in cannabis stock

With Canada having legalised marijuana and the U.K. considering allowing cannabis for medicinal purposes, is it time to consider pot stock investment?

It’s boom time for the pot industry: Canada has just legalised cannabis for recreational purposes, and on the other side of the pond the UK is reviewing its zero-tolerance policy looking at the possibility to allow medicinal marijuana. Could these events be a trigger for pioneering investors to pour money into the sector?

Undeniably, there is a huge potential in the market.

According to the Adam Smith Institute, an economic think tank, the global market for medicinal cannabis alone will be worth £40bn by 2025.

Regional outlook also delivers some impressive numbers: the recreational market in the US alone is expected to be worth $24.5 billion by 2021.

In Canada, at last count, Health Canada reported that at the end of 2017 there were almost 130,000 registered users of medical cannabis. This is a 32% increase since the last recorded number of 98,000 was reported in September 2016.

Nick Davis, CEO of Memery Crystal, specialist international law firm, said recently in an interview to Sky News, that in Europe the medicinal cannabis market was worth $2.5 billion last year.

The list of countries where medicinal cannabis is allowed fully or with certain limitations is pretty extensive, among them Uruguay, Canada, Australia, Chile, the United States, the Netherlands, Colombia, Czech Republic, Israel, Romania, Macedonia, Puerto Rico, France, Germany, Greece, etc.

In the U.K. cannabis is illegal in any form right now, however, the U.K. government is licensing the world’s biggest medical cannabis production and export market.

The UK produced 95 tonnes of marijuana for medicinal and scientific use during 2016, which is an incredible 44.9% of the world’s total, according to a report from the International Narcotics Control Board of the United Nations.

Yet, despite such a profitable cannabis export business, inside the U.K. there is a general feeling of uncertainty whether it is acceptable to invest in marijuana. The interest is there, but it’s growing slowly.

The lawyers Memery Crystal is about to list the second investment company on a junior market that will be investing in the countries where marijuana is legal.

Nick Davis added that when “there is a feeling amongst investment community that it is an acceptable clause” and the conversation starts, it will have a snowball effect.

Legalising medicinal cannabis in the U.K. can give a boost to biotech companies as well as growers and servicing industries.

However, as Adrian Lowcock, investment director at multi-manager Architas warns, investors should be cautious when considering new markets. They attract a lot of new companies; many of them don’t make it, and some of those that do, have spent so much to get there that profits might not live up to expectations.

“Medicinal marijuana is not a new idea so groups with experience should have an advantage, but investors should treat this as similar to biotech – one bad result could hammer a company’s share price, while a good result could send the price rocketing,”
Adrian Lowcock, investment director at multi-manager Architas

Read the original article on LoveMoney.com. ©2018