After a lengthy battle, Florida passed legislation in November legalizing medical marijuana. As a state with a prime cannabis market-with a large retirement population, many residents face aging-related ailments-Florida has extensive marijuana investing potential.
Fox Business reported that marijuana stocks “soared” in 2016, with massive gains of over 2000 percent. As more states have joined the legalization process, the market is only expected to grow and expand. Many foresee a shift similar to 1933, when Prohibition of alcohol was repealed via the 21st Amendment to the US Constitution.
Florida, however, faces a challenge unique to their state: as of now, the potential for investments is less compared to other legalized states across the nation. Florida’s Amendment Two is filled with restrictions and regulations making access to marijuana more restrictive. This is subject to change as the MMJ kinks are dissolved (read more on Florida’s uphill marijuana battle).
Despite this short-term diversity, there is growth potential within the Florida marijuana market. According to Forbes, “A new report from New Frontier Data with market data provided by Arcview Market Research projects that Florida’s market will grow to $1.6 billion by 2020 at a compound annual growth rate of 140%. That would make it half the size of California’s projected $2.6 billion market and top the projected $1.5 billion medical marijuana market for Colorado.” In addition, this report hypothesizes that Florida could make up 7.5% of the total legal U.S. cannabis market and up to 14% by 2020.
This major boom in the Florida marijuana market will not be in effect for some time-until sales begin after September 2017. For immediate investment, however, there are a few options.
The most beneficial option is likely exploring marijuana stocks not specific to Florida, but cannabis culture in general. For example, look to Canada. Canopy Growth and Aphria, Inc. are Canadian companies worth investigating-their influence on the industry has grown, since being North America’s first federally regulated, publically traded producer of cannabis; the company parents Tweed and Tweed Farms and Bedrocan Canada. Investors might also look into companies like Europe’s GW Pharmaceuticals, which is working on cannabis-infused medicines for mass productions once they secure FDA approval.
These larger corporations are a safer alternative to looking local: there are small cannabis companies that “are trading on over the counter markets, which are risky, unregulated exchanges that are prone to fraud,” writer Todd Campbell of The Motley Fool wrote.
Investors might also look into companies like Europe’s GW Pharmaceuticals, which is working on cannabis-infused medicines for mass productions once they secure FDA approval.
When looking to invest in smaller companies, be cautious. Unlike other stock industries, it’s doubtful that a broker would be helpful in discussing marijuana options. Much of the research is self-managed. While doing so, have a plan in place. Make a call to the company and ask for proof of assets and balance sheets, look into management and their backgrounds, and be skeptical of small investments.
Be on the lookout: the medical marijuana industry in Florida is about to explode-for curious investors, now is the time to initiate the first steps and prepare for the boom, even if the beginning phases are to look abroad.