Things to Know about CBD before Investing in Marijuana Stocks
October 2, 2019 (Investorideas.com Newswire) No industry is growing as fast as the legal cannabis industry. It is expected that by the end of this year, global sales are going to increase by 38% and by 2030, it will quadruple. With ancillary and direct company becoming a part of this; it can be easily seen as to why marijuana stocks have left a large part of their market benefiting from them in the first quarter. Several investors are looking for the right time for making an investment and a good investment strategy is CFD.
However, inside the cannabis group, there are various categories and sub-categories which offer a different degree of intrigue for the investors. There is no sub-category of marijuana that is as popular as CBD or cannabidiol.
If you are investing in marijuana stock, here are a few things that you need to know.
CBD Audience is Different from that of THC
CBD is just one of the 110 cannabinoids which have been segregated by researchers. However, only CBD and THC or tetrahydrocannabinol have become more popular. The latter is a psychoactive cannabinoid getting you high when you use it. This is mostly targeted by recreational consumers. In the meantime, CBD is non-psychoactive and is well-known for its medical benefits. Thus, it is going to be targeted by casual users and the medical community who doesn't want to get high.
It Legality is Confusing
Many tend to be confused if CBD is legal or not. For this, you will have to know the source of CBD. Cannabis and the other extracts of the marijuana plant, at a federal level, are taken to be illegal. Even if CBD is taken out from a cannabis plant, there is a chance that it is legal in the 33 states that have passed marijuana law. Transporting products derived from cannabis from one state to the other is against the law.
However, President Donald Trump has signed a farm bill to the law in December 2018 which made hemp and its products legal in 50 states. Hemp has a lower concentration of THC but has a rich content of CBD which makes it ideal for CBD extraction.
It's a Great Market Opportunity
Global sales of CBD is expected to increase from $591m in 2018 to about $22m by the end of 2022. This will lead to compound growth of 147% for people keeping at home. Even though it has to be seen if the products of CBD will be able to hit this goal, there is no doubt about the fact the fuzz related to CBD picking up on Wall Street.
High Margins are Attractive
It isn't just the sales growth potential of the products of CBD which is attractive, the margins are also quite interesting. Example of U.S's recreational legal market shows and commoditization and oversupply of dried cannabis. Hence, growers should put in more effort into bringing in diversity in the product line to prevent margin deterioration. Products which contain CBD usually have a higher price in comparison to traditional dried flower.
Michael Sullivan, once a drug-addict has turned out his future by quitting. He now pens down different articles on cannabis and gives his expert advice to people who would like to quit.
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