Marijuana Stocks FAQs
Cannabis Growth Fund offers its insight into the cannabis industry with a selection of marijuana stocks FAQs. Learn more about our mutual fund and how you can invest.
It is highly apparent that there is a necessity for marijuana stocks FAQs. There are plenty of questions that curious investors and newcomers to finance come to us with at Cannabis Growth Fund. We are happy to share our insights with those who need them.
Marijuana Stocks Guide
Many people who consider investing in marijuana stocks are already involved in the stock market. A study by Investopedia found that those researching investments in the cannabis industry were also likely to be looking at exchange-traded funds and virtual currency. Interestingly, the demographics also skewed significantly older than expected: 45-64 year-olds are between 25-30% more likely to be interested in content concerning marijuana investment than average. Men are also more likely to be interested in marijuana investment than women. This is potentially due to the riskier nature of the marijuana market than the broader stock market: men are more likely to take risks with their money than women.
Frequently Asked Questions About the Marijuana Stock Market
These are some of the questions we most commonly hear. If you’re getting questions from your friends and family about investing in cannabis, you may be able to find an answer for them here.
Is it legal to invest in marijuana stocks in the US?
Yes, it is currently legal to buy marijuana stocks in the United States. You can invest your money in companies that sell marijuana, or companies that grow or harvest it. You can even invest in companies that provide the tools for the industry to produce: agricultural equipment, soil, or lighting, for example.
Where can I buy marijuana stocks?
While most US cannabis stocks are only to be found on OTC (over-the-counter) markets, the New York Stock Exchange and Nasdaq are allowing companies some companies to be traded because they are not violating U.S. federal laws.
How much is the industry worth?
This is a difficult one to answer, since the industry is still in a period of rapid growth. It’s estimated that legal cannabis sales in North America were approximately $17 billion in 2019. By 2024, assuming American federal legalization to match the situation in Canada, marijuana could be worth $44.8 billion. It’s expected, though, that Canada will comprise less than 10% of that total.
Cannabis Stock Trades FAQs
What is the market’s confidence in the leadership of the sector?
A good question: executives have been pouring into the sector from other industries. Specifically, pharmaceutical and consumer packaged goods have seen migration. With more trusted faces at the helm of new (or relatively new) marijuana businesses, investors are more likely to put their money in.
How much cannabis is being grown?
Major Canadian producers announce quarterly their pot growth and sales through their financial statements. However, there is some opacity surrounding the cost of the product and how much it is being sold for. Investors are pushing for companies to share more information about their sales. Some companies use cost-per-gram, but this is a flawed metric. Comparing companies with imprecise metrics like this can be difficult.
What are these marijuana cryptocurrencies I’ve heard about?
Marijuana is not yet federally legal, so there are some investors who trade in cryptocurrencies designed specifically for legal marijuana trading. Some include CannabisCoin, HempCoin, CannaCoin, and PotCoin. They operate similarly to Bitcoin.
Can I invest in Canadian marijuana stocks?
Yes. Many major trading platforms permit international trading of publicly traded foreign companies through instruments like mutual funds, ADRs, marijuana ETFs, MNCs, and direct investing.
Are there other territories to invest in marijuana?
Yes. Germany is seeing activity since medical marijuana was legalized there in 2017. While the population there is more resistant to the idea of full decriminalization of cannabis than in the United States (only one in three Germans support weed legalization, compared to two in three Americans), there are many seeking to invest in growing cannabis within German borders, or at least closer than Canada.
What is the relevance of IRS Code 280E?
IRS Code 280E prevents companies producing controlled substances from claiming deductions or credits on their taxable income. Initially enacted to punish cocaine traffickers, it nevertheless harms marijuana growers and other legal cannabis companies because cannabis is still listed as a Schedule I controlled substance. There are workarounds, but they are byzantine and vary from state to state. While bipartisan legislation to free cannabis from this tax trap, if not reschedule cannabis, has passed the House of Representatives, it has yet to pass the Senate: though, with the Senate now nominally under Democrat control, it may become more marijuana-friendly.
Is Joe Biden going to legalize marijuana and invigorate the market?
Is Joe Biden going to legalize marijuana and invigorate the market? This is a situation that we at Cannabis Growth Fund are paying close attention to. The relationship between cannabis and Joe Biden has been troubled in the past, to say the least. However, the movement to legalize recreational cannabis for adults is nationally popular. Many populous states have either already legalized (California, Michigan, New Jersey, Illinois) or are planning to legalize cannabis in the near-future (New York, Virginia). The lure of new jobs and new sources of tax income to shore up a pandemic-battered economy could prove a tempting one for federal legislators, especially if supported by the White House. It is known that the last attempt at passing a federal legalization bill, the MORE Act, was introduced in the Senate by now Vice-President Kamala Harris, so it is safe to say there are sympathetic ears in the administration. According to New Frontier Data, federal legalization may be worth as much as $128.8 billion in taxes, and create up to 1.6 million new jobs.
Are there other legislative efforts the industry is paying attention to?
Yes. The SAFE Banking Act of 2020 seeks to expedite the financial dealings of cannabis businesses, since cannabis’ federal status makes many transactions— even simply opening a bank account— more difficult. Any progress on this legislation, currently stalled in the Senate, will doubtless attract the interest of many in the industry.
Where is a good place to start investing in legal marijuana?
If you are unsure about personal finance management, and would prefer to trust your investments to professionals, you may want to look into investing in a fund. There are different kinds of funds that may appeal to you. Mutual funds are very popular with Americans. According to market data, nearly half of all US households have money in at least one mutual fund, either through employer-sponsored retirement plans or independently.
Cannabis Growth Fund is an open-end mutual fund that invests primarily in exchange-listed equity securities of cannabis companies, or companies that provide ancillary products or services to complement recreational or medical cannabis.
If you want to learn how to invest in our fund, you can pursue one of several ways. We are available through multiple brokerage firms, including Ameritrade and Interactive Brokers. You can open an account by mail. You can also open a Cannabis Growth Fund account online. Call us on (800) 446-1179 if you have questions not covered above.
Foothill Capital Management is the advisor of the Cannabis Growth Fund and is not affiliated with the distributor.
OF SPECIAL NOTE
Statements, estimates and forecasts are subject to significant legal, business, economic, and competitive uncertainties, including competition, limited access to bank services, litigation, enforcement actions, and the receipt of government authorizations. This includes differences in, among other things, laws, regulations and guidelines relating to the manufacture, transportation, and storage of cannabis, and the conduct of operations, which vary among the U.S. federal government, various states, and foreign jurisdictions. There can no assurance that such estimates and/or forecasts will be realized, and these are not indicative of future investment performance. Historical data is not indicative of future performance.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained from 888.885.0588 or at https://www.cannabisgrowthfunds.com/. Please read the prospectus carefully before you invest.
Investing involves risk, including possible loss of principal. The cannabis industry is subject to rapidly evolving laws, rules and regulations, and increasing competition which may cause such companies to change business model, shrink or suddenly close. These may limit access to banks, and create significant burdens on company resources due to litigation, enforcement actions, receipt of necessary permits and authorizations to engage in medical cannabis research or to otherwise cultivate, possess or distribute cannabis. Possession and use of cannabis is illegal under federal and certain states’ laws, which may negatively impact the value of Fund investments. Where legalized by states, cannabis possession and use remains a violation of federal law. The companies in which the Fund invests are subject to various laws and regulations relating to the manufacture, management, transportation, storage and disposal of cannabis, including health and safety, conduct of operations, and environmental protection. Even if a company’s operations are permitted under current law, they may not be permitted in the future, and a company may not be able to continue operations in its current location. Controlled substance legislation differs significantly between countries and may limit a company’s ability to sell products.
Foreign investing involves social and political instability, market illiquidity, exchange-rate fluctuation, high volatility and limited regulation risks. Emerging markets involve different and greater risks, as they are smaller, less liquid and more volatile than more developed countries. Investments made in small, mid-capitalization and micro-capitalization companies may be more volatile and less liquid due to limited resources or product lines and more sensitive to economic factors. Fund investments will be concentrated in an industry or group of industries, and the value of Fund shares may rise and fall more than more diversified funds. Purchasing and writing put and call options entails greater than ordinary investment risks. Options ownership involves the payment of premiums, which may negatively impact Fund performance. Please see the prospectus for details of these and other risks. Distributed by IMST Distributors, LLC.