The cannabis industry has gone well beyond the realm of recreational use. Researchers are finding better uses for the product, including in the industrial and medical fields.
That leaves a major question mark on the investment side of things. Is the cannabis industry a good place to invest in 2021? And what dangers does developing the cannabis industry in the US have?
In this article, we answer all this and more. So if you want to make a more informed decision about investing in the cannabis industry, then keep reading.
Changing Attitudes to Cannabis
For a major part of history, cannabis has been considered a public health hazard and poison since the 1920s. Cannabis is a drug known to induce signs of memory loss and a shorter attention span in users.
However, in more recent times, cannabis has become legalized within certain restrictions. And public and governmental attitudes towards cannabis have drastically changed. Studies suggest that this has to do with declining religious affiliation and the shift in how the media portrays cannabis.
Federal law still dictates that almost all uses of marijuana are illegal, even medical ones. This is mostly per the Controlled Substances Act of 1970. But many state-level laws have lightened the ban.
Public and political attitudes toward cannabis are gradually changing. And old-timey prohibitions are now being lifted to allow for more medical and recreational use of the drug. And yes, that also means a ripe investment opportunity as future trends of CBD in the US rise.
Due to the rapid legalization of cannabis in the US, investors seek to get returns from the industry. Legal sales of cannabis are expected to be worth $22 billion by just 2022. And more and more people are getting on board the idea of investing in the cannabis industry.
The Danger of The Cannabis Industry in The United States
Despite being legalized in many states, the cannabis industry does pose some threats that no one can deny. These are some of the ways that developing industry for cannabis in the US will have negative effects:
One of the leading negative side-effects of developing the cannabis industry is drug abuse. Legally speaking, recreational marijuana is allowed within certain restrictions. But it does not follow that everyone who buys marijuana for recreational purposes will do so within those rules. And this is severely affecting the future of cannabis market.
Drug abuse can lead to poor public health, low memory and attention spans, and deteriorating mental health. Additionally, overdosage can lead to physical health issues, such as bronchitis when a person smokes it. Besides that, cannabis is known to permanently reduce your IQ points by 8 if consumed in your earlier years.
It's not just the consumers who are at risk when developing the cannabis industry. People working in marijuana farms and factories will also be affected. They will be exposed to harmful chemicals that can affect their physical and mental health.
However, this exposure is not to marijuana itself but to the chemicals used to process it. The most dangerous of these is carbon dioxide. But pesticides and corrosive cleaning substances also pose major threats to people working in the field.
And that's not all.
People working with marijuana can also be affected by it, though it's less likely. Marijuana exposure in the workplace is not something new. However, it's impacting the future of CBD industry in America, severely hindering the medicinal availability of the drug as well.
Theft is by far the biggest issue that cannabis industries will face.
Who doesn't want to get a free joint?
And that's why most companies will have to deal with theft issues even in their starting phases strictly.
But theft doesn't just occur from outside. If we develop a cannabis industry, it wouldn't be surprising to see some workers getting high off the stuff.
Finally, there's product tampering. Since the cannabis industry is a new industry with hundreds of regulations, product tampering is inevitable. Companies will find it too cost-ineffective to implement all the safety regulations. And they might bypass them to save a few bucks.
This can lead to major problems, both on the public health and legal side. And it may hinder cannabis market opportunities in the US.
Advantages of Developing and Investing in The Cannabis Industry
Although many people only see the negative aspects, there are many positive aspects to the cannabis industry:
Increased Tax Revenues
One of the biggest advantages of producing cannabis in the United States is the increase in tax revenues. In theory, since cannabis is such a highly consumed product, tax revenues generated from this industry will be massive.
And in practice, we're already seeing some major tax revenue increases in Colorado and Washington. To give you an idea of just how much potential this holds, in 2019, US cannabis sales were $12.2 billion. And that number is only expected to rise to $31.1 billion in 2024.
Hence, no doubt, developing a cannabis industry will have positive effects on the US economy.
Better Job Opportunities
Due to the massive potential size of the industry, cannabis factories and farms will be employing hundreds of people. This will create an additional resource for people to earn for themselves, especially since a lot of it doesn't require skills. Jobs in the marijuana business include farming, producing, distributing, and selling.
It is estimated that if cannabis were to become legalized and industrialized, we could be supporting over 41,000 jobs. And that's only until the end of 2024.
Money Saved on Marijuana Prohibition
In 2013, a report showed that marijuana prohibition, at a federal level, costs about $3.6 billion. Since governments need to enforce anti-marijuana laws, they could save a lot of money by legalizing it. In fact, states that have already legalized it have seen a rise in savings.
And that's not all. Since incarcerations also require ample cash, we could be saving up hundreds by not pursuing legal cases. With the development of cannabis industry in the United States, more money and revenue will be saved.
Hemp Fiber Production
Incredible use of cannabis and its side-products is in the production of hemp. Hemp is a product derived from cannabis that is low in THCs and is safe to use. One of the most major applications of hemp is in the development and production of hemp fiber.
Hemp fiber might soon replace regular cotton fiber in the market. Big companies like Levi's have already started implementing it. This company has now started to use hemp instead of cotton. And it's paving the way for the future of producing marijuana in the United States.
Production of Renewable Bio-Fuels
In recent years, cannabis is being considered a viable source of renewable bio-fuel. As a biofuel, it's not known to emit greenhouse gasses when burned and can improve the economy. Furthermore, industrial hemp can be used to make bio-ethanol and bio-diesel.
However, despite the many benefits of CBD industry in America, industrial hemp has many legal prohibitions.
What Is the Future of The Cannabis Industry?
The cannabis industry has a bright future, especially with recent legalizations. However, law enforcement agencies will have to ensure that the correct procedures are followed. Otherwise, the cannabis and hemp industries pose major public health threats.
Should You Invest in Cannabis Industry Stocks?
The cannabis industry is rapidly growing. Therefore, investing in cannabis industry stocks will indeed prove fruitful in the coming years. Just in 2019, the total sales acquired from cannabis production were around $12.2 billion. And that number is only expected to rise by 2024.
How To Get into The Cannabis Industry?
Investing in cannabis starts from knowing about the industry. Attend medical cannabis conference and talks on CBD. Research into the various areas where you can invest. And understand the risks. Cannabis is a growing industry with only the law in its way. If companies can produce cannabis within legal restrictions, then your investments should be safe.
Now you know how to get into the cannabis industry. Investing in the cannabis industry might just be your best decision this year. The industry is growing rapidly, especially since now public opinion towards cannabis has changed. And the drug is becoming legalized across multiple US states for recreational, industrial, and medical uses.
However, the future of the cannabis industry in the United States isn't too bright. While the cannabis industry has a lot of potentials, it still faces restrictions from the law. These restrictions are in place to keep the public safe. And if followed correctly, industrial cannabis could be the next big thing.
And that means a perfect investment opportunity for people who want to get into the cannabis industry.