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It’s impossible not to have heard of CBD by now. This compound has gone from strength to strength, gathering a massive number of fans who use it daily.
The truth is, this is a lucrative industry. Anyone who’s anyone is cashing in on this trend. Since the 2018 Farm Bill made restrictions on CBD looser, many brands and businesspeople are looking to get in on the CBD market.
However, there’s a real question about whether you should get involved with CBD investments and stocks. Should you invest in CBD? What are the risks? Let’s find out.
The CBD Market Is Truly Enormous
It’s not hard to assume that the CBD market is pretty big. After all, brands are now brandishing these three letters in windows and promoting brand new CBD products all the time. That said, you might be shocked by the sheer enormity of the CBD market.
In January 2018, a study by Consumer Reports in 2019 found that, out of 4000 Americans, more than 25% had tried CBD. One in seven said they used CBD daily. With usage continuing to increase, just imagine the figures now. Plus, the number of available products is constantly increasing, with new and innovative CBD edibles, topicals, and more available every week.
Predictions initially suggested 813.2 million CBD sales by the end of 2019. For reference, current estimates indicate that the CBD market will reach $7.1 billion by the end of 2020. In other words, this is a huge – and growing – market that can make savvy people a lot of money.
The Potential Downsides
Investing in CBD, however, is a little risky. After all, this is a compound fraught with stigma and potential legal issues. Prior to 2018, only universities could grow hemp, and strictly for research purposes. Brands making CBD products had to import hemp from other countries – at much higher cost.
Fortunately, the CBD industry is now in a better place. Most states allow farmers to grow hemp for a variety of purposes. That said, the specifics vary from state to state, and the situation on a federal level is always confusing. The federal government remain tight-lipped on all things hemp and CBD, creating waves of anxiety among CBD brands and investors alike.
Despite problems, top-quality brands like PureKana manage to ship to the majority of US states. As long as companies stick to hemp plants with a THC level of less than 0.3%, they should be okay.
It still makes investing in CBD a little risky though – a tad more so than other investments. Every investment comes with a degree of risk. Make sure you have enough money to gamble and that you have reliable brokers.
Investing in CBD can definitely be worth it, but you need to do all the relevant research beforehand. Make sure you understand the risks; after all, the CBD market comes with a lot of fluctuations and twists. If you’re well-versed in CBD and have a good lawyer, then an investment may well be worth it.
How to Invest in CBD – Smartly
There are a few ways to invest in CBD oil.
Involved Investment: Those with prior business or investment experience may wish to consider a direct involvement with a CBD brand. Involved investment also includes starting your own company. Investing in a local business will require you to keep a close eye on state regulations, while pumping cash into a national/international company requires even more knowledge.
Purchasing Shares: Lots of companies on the CBD market now trade publicly. You can invest and make a passive income without having to be directly involved with the company. Public stock exchanges for CBD are definitely riskier, as the value of cannabis stocks tends to fluctuate wildly.
Investing in Alternative Industries: The CBD industry is bleeding into other areas of the market. Restaurants, bars, and coffee shops may now be offering exciting CBD ingredients and recipes. Marketing firms and banking companies may also have specialty CBD or cannabis branches for you to get involved with.
No matter which form of investment you choose, make sure you read up on CBD carefully beforehand. It’s vital to have a firm knowledge of cannabis, cannabinoids, and the current legislation.
That said, it’s not enough to have a quick browse and call it a day. CBD legislation is changing all the time. Once you have decided to invest in CBD, it is a commitment to educating yourself often and keeping up to date.
Still, if you’re a smart investor with some business know-how, it could be a worthy commitment.
