Investment Strategies in the Shifting Cannabis Market

The cannabis market has remained an extremely interesting industry to watch and partake in over the course of the past several years. With new companies coming to fruition every day and legislation working to change in favor of the industry, it seems as though cannabis is the market of the future. All of this is good news however, investors should know that because the industry is so new, there are some strategies that may be better than ever when it comes to investing in the market.

Investments in the American cannabis market have already hit beyond the $3 billion mark just in 2018 thus far, and there are still many months to come before the year is over. That amount of interest has made watching the cannabis market a new and favored pastime for those looking to take part in such a groundbreaking industry.

One of the best ways to invest in the cannabis space and alternatively one of the safest, has been through the use of ETFs or exchange-traded funds. These ETFs provide a large amount of exposure to the market with a minimized risk due to the diversity of the ETF. According to one report, some ETFs to look out for include “the ETFMG Alternative Harvest ETF (NYSE:MJ), the Horizons Marijuana Life Sciences Index ETF (OTC:HMLSF) (TSE:HMMJ), and the Evolve Marijuana ETF (SEED.TO).” ETFs are often one of the safest strategies foe investing due to the fact that they are made up of highly researched stocks to create a safe and broad portfolio.

Another safe option that many investors have been considering is the idea of ancillary markets associated with cannabis. Given that the pure-play cannabis stocks have grown so much over the course of the past few years, it only makes sense that the ancillary market has grown as well. New regulations in the market have also helped this part of the industry to grow as well. Regulations such as packaging restrictions have helped to grow the market by a large amount as companies do not have the time often to spend worrying about whether or not their packaging meets restrictions. A large part of the ancillary market has also been dedicated to companies that help growers grow the cannabis plant.

One of the main companies that has been working in the growth sector of the ancillary cannabis market has been Scotts Miracle-Gro (NYSE: SMG). Scotts has been around for a long time now, and has mostly delved into the plant growing market. With the advent of the cannabis market, Scotts has been working to create new lines of products specifically aimed at growing marijuana properly. The company also reported that they will be working on a series of acquisitions to help make the transition to cannabis as smooth as possible. The company recently completed their acquisition of Sunlight Supply which should continue to build the cannabis side of their business. With a P/E ratio of 18, it seems as though Scotts should be one company that will stay on investors minds in the near future.

The cannabis market is still very much in its early stages of growth which means that there is a large amount of potential as we move toward the future. The hopes are high that the coming years will remain extremely lucrative for the whole of the marijuana market as new legislation and the changing public perception go into effect. Only time will tell how well the market continues to perform amidst regulation and investor growth.