The volatile stock market is assuredly creating apprehension for many investors who do not know where to turn for secure stock purchases. The typical available options that have been considered blue chip purchases in the past are even suspect in the current situation due to the fallout of the Covid-19 pandemic that has shut down the United States economy for the most part. This is indeed uncharted territory for many investors. But there are still certain emerging sectors of the economy that will do well regardless of how the overall market performs, and one of those investment opportunities is possibly marijuana stocks. Although many so-called marketing professionals are not exactly keen on marijuana investing, there are still several reasons why marijuana will continue to be a solid choice for both new and established investors.
New Product Development
Marijuana investment opportunities fall into several categories. Not only is marijuana now legal in certain states that have authorized official sales, medical marijuana states are numerous and new CBD products are also in current development. Edible product lines have become very popular for those who want the relief associated with THC usage without having to actually smoke the product. Some states such as Kentucky have authorized medical marijuana but only in the edible form, which appears to be a trend that may continue for other remaining states that have been slow to make the transition.
While many states have legalized marijuana within their jurisdictions, the THC substance is still controlled at the federal level. The federal Drug Enforcement Agency has just chosen not to pursue prosecutions within the states and only focus on major shipments outside the scope of state allowance. Medical marijuana distributors have largely been allowed to operate without penalty. And, the federal government has already authorized the use of industrial hemp nationwide. Many investment professionals think federal marijuana legalization will be the next step in the market, but more than likely not in 2020. The Coronavirus pandemic has radically changed the nation and Congress has a difficult enough time passing legislation as it is. However, this action is considered a sure thing in the near future and those who invest now will be well-situated when legalization happens.
Long-Term Growth Potential
Another obvious development in the marijuana investment market is what will happen after legislation becomes a rapidly emerging trend. Federal legalization will clearly have a domino effect, and many states will jump on board quickly because of the power to tax. And legality will encourage more people to use marijuana simply because they know they cannot be jailed or prosecuted for mere possession. Those who have used marijuana in the past and have stopped for some reason may also reconsider using the product once again. Just as in most markets, it could take some time for sales to increase, but there could also be a major uptick because of the potential for edibles in the legal marketplace that are not necessarily available in states where the black market is still the most common method of purchasing marijuana.
These are just a few of the reasons why the marijuana investment outlook appears positive in the future, if not the near future. The general fall of the stock market will obviously have an impact on all stocks to some degree. But, marijuana could well be one of those sectors where performance will show solid growth potential over the long term for those who can find a good price point in a secure operation within the supply chain. And when federal legalization does occur in conjunction with more states legalizing the product, the demand will clearly be in place. It is best to be invested in the marijuana market prior to that foreseeable incline.