Investment in Cannabis and Marijuana Industry Worldwide

How to invest in medical cannabis

Cannabis has come a long way in recent years, and with legalization ready to take shape there’s no signs of it slowing down. Marijuana has also widely been used as treatment for various diseases for quite some time; as such, investor interest in the medical cannabis space has indeed taken flight.

In Canada, the federal government is readying itself to announce plans to legalize cannabis in the country–recreationally and medically–and expected to go into effect on July 1, 2018.

Laws for recreational cannabis in the US are still a work in progress. That said, it is legal in eight states while 28 have some form of medical marijuana. Still, cannabis remains illegal at a federal law, but Canada’s legalization could certainly be a push for its southern neighbors.

Hemp refers to the cannabis plant stalk and seeds, and is used for a variety of applications, including clothing, textiles, paper, body-care products, food and even pet products. Hemp fiber is known to be the longest, strongest and most durable of all natural fibers, and cultivation requires no chemicals, pesticides or herbicides. Hemp seeds are also known for their nutritious benefits as they are an all-natural, grain-free, gluten-free source of omega 3 and omega 6 fatty acids; they are also very high in protein and contain natural antioxidants.

Hemp has very low tetrahydrocannabinol (THC) levels — one-tenth of the levels seen in marijuana — and doesn’t provide any psychoactive effects. Cannabis, on the other hand, is specifically bred for the THC resin that grows on the buds or flowers of the cannabis plant, and is consumed in various ways for medical, recreational and spiritual use.

Laws surrounding medical cannabis

It is important for investors to understand the legalities surrounding the medical cannabis and hemp industries. One key point is that regulations in Canada and the US differ from the municipal, provincial and state levels to the federal level.

Despite having low levels of mind-altering THC, hemp has been lumped into the same category as marijuana in the US, and is classified as a Schedule 1 drug under the Controlled Substances Act. Previously, the US allowed patients with a variety of medical conditions to smoke marijuana in a variety of states since 1996, and four states have voted to allow the sale and distribution of marijuana. However, that number is now growing.

As noted above, cannabis is now legal in eight states while 28 have it legal in some form at a medical level. That said, it’s still illegal under federal law and there’s no signs indicating that will happen any time soon.

On the other hand, in Canada the cannabis sector is growing rapidly: as previously noted, legalization at a recreational and medical level is expected to go into effect on July 1, 2018.

How to invest in medical cannabis
In April 2015, Bloomberg Intelligence identified 55 public companies in the cannabis space with a combined market cap of $3 billion. The publication’s 2015 Weed Index groups the companies into seven categories: pharmaceutical/research, producer, consumer, real estate, consulting, technology and industrial. Companies in the pharmaceutical/research sector were reported as having a market cap of $1.5 billion. Producers, including medical cannabis growers, cultivators and distributors, came in second place at $645 million.

Of course, the still-federally illegal industry continues to grow rapidly, with more and more companies going public.  The industry in the US could potentially grow to $50 billion in the next decade, which is more than eight times its current size. 2016 marijuana sales totalled $7.2 billion alone, with medical cannabis sales poised to grow to $13.3 billion by 2020–up from $4.7 billion in 2016.

Giadha Aguirre De Carcer, founder and CEO of New Frontier Data, said in the press release that the numbers “confirm that cannabis is a major economic driver and job-creation engine for the US economy.

“While we see a potential drop in total number of U.S. jobs created in 2017, as reported by Kiplinger, as well as an overall expected drop in GDP growth, the cannabis industry continues to be a positive contributing factor to growth at a time of potential decline,” she continued.” We expect the cannabis industry’s growth to be slowed down to some degree in the next three to five years, however with projected total market sales to exceed $24 billion by 2025, and the possibility of almost 300,000 jobs by 2020, it remains a positive economic force in the U.S.”

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When looking at Canadian medical cannabis companies to invest in, the first ever marijuana ETF was launched on the Toronto Stock Exchange at the beginning of April 2017. In fact, 14 marijuana companies are listed on the exchange, at least to start out, and that number certainly has the potential to grow to include more.

Another option for investment in the cannabis industry is to look at businesses that don’t actually deal with the plants themselves — everything from growing and harvesting equipment, such as lights and fertilizers, to medical containers. Investing in such companies removes the issue of legality completely.

This article was originally published on September 22, 2015.

Investing in Cannabis Industry 
Globally, cannabis production and research has grown significantly in the recent years. The anticipated market is estimated to be over 300 billion dollars by 2022. Australia offers great opportunities in research and development of medicinal cannabis as a treatment for arthritis, cancer, common pain, epilepsy, glaucoma, nausea and vomiting and post-traumatic stress (PTSD), multiple sclerosis and Crohn's Disease. 

Medicinal Organic Cannabis Australia (MOCA) is poised to lead on the way. 

Cannabis is out of tune with this paradigm in multiple ways. For example, it is a medicine pioneered and promoted by patients and their caregivers, instead of scientific researchers or physicians. It is often consumed in its herbal form, using unconventional modes of intake such as smoking, vaporizing, tea or brownies. Moreover, cannabis may be used to treat difficult symptoms and improve quality of life for the chronically ill, but it also serves as a recreational drug that affects the minds of millions. This situation is further complicated by a continuously growing attention for cannabis by the media worldwide. As a result, patients, physicians, regulators and scientists may find it hard to understand what is truly medicinal about cannabis. Despite the fact that everyone seems to have an opinion about it, reliable information on cannabis is still hard to find. Pharmaceutical researchers, traditionally focusing on isolated active ingredients, have a hard time understanding cannabis in its complex herbal form. 

Clinical trials, performed under strict conditions and regulations, are incapable of studying the unconventional administration forms, the many cannabis varieties and the dosing regimens that experienced users commonly use. And although a wealth of information seems to be available on cannabis through popular websites, discussion forums and magazines, this is often based on single patient stories and assumptions. Opinions and facts may get mixed up when seriously ill patients share their personal experiences with others without the involvement of a medical professional. 

As a result of all this, cannabis seems to be caught in the middle: too herbal for modern allopathic medicine, and yet too potent for herbal or ‘alternative’ medicine. There is a need for balanced information, clearly communicating the therapeutic but also the less desired effects of cannabis use.