The rise of CBD has been nothing short of remarkable. The substance wasn’t even legal until late 2018. Now, according to some surveys, CBD has been tried by as many as 1 in 3 adults. People are using it for all sorts of reasons, including help sleeping, pain management, and mental health. This has given rise to a wide array of CBD companies who sell the treatment, and it does beg the question: Are these stocks a good investment?
What CBD and Marijuana stocks are available?
With CBD legal across the country and marijuana legal in an increasing number of states, the number of stock companies that sell marijuana and CBD stocks is on the rise. Indeed, there is an array of such companies. These include MedMen Enterprises (MMNFF), OrganiGram Holdings (OGI), Sundial Growers (SDNL), GW Pharmaceuticals (GWPH), and many, many more. There are also marijuana and CBD ETFs. These are funds that are essentially baskets of marijuana-related stocks and include AdvisorShares Pure Cannabis ETF (YOLO) and Amplify Seymour Cannabis ETF (CNBS). These ETFs can be critical in diversifying your cannabis portfolio.
Is CBD a Good Investment?
The old axiom about stocks is that past performance is no guarantee of future success. However, past performance is still worth examining, and all financial projections are that the CBD industry has done very well. Its legalization at the federal level lit a spark on demand for the substance, and with more research ongoing, it appears that CBD may become more popular. To be clear, there are threats to the industry: Future FDA regulations may tighten the availability of the substance, and further research may reveal it is harmful. However, for now, demand for the substance continues to grow.
The question of whether or not CBD is a good investment for you can only be answered by you. After all, every industry comes with risks and rewards, and it’s up to you to determine if these benefits or challenges fit into your financial portfolio.
What Should You Look for in a CBD Stock?
According to the financial experts at Money Morning, when looking for CBD stocks, “An excellent place to start when you want to invest in CBD stock is by reviewing a company’s financial filings.” Start there. How is a company doing? Are they growing in revenue? How has their stock price done? Any regulatory issues to be concerned with?
Remember, given the newness of the market, a track record of success and diversified operations can be useful. You should also find a company that is positioned for long-term growth. It appears as if the movement to legalize marijuana is growing. As such, you want to make sure that your financial future is tied to a company that is well-positioned to take advantage of the changing CBD and marijuana market.
CBD and marijuana stocks are both relatively new additions to the financial market. However, if they meet your financial goals, they can be extremely useful additions to your portfolio.