Cannabidiol (CBD) is a compound that is produced by the cannabis plant that interacts with receptors in the immune system. The interaction between the cannabinoid and receptors can result in the alleviation of pain, inflammation, and anxiety. CBD oil also has anti-seizure characteristics, and there is anecdotal evidence that it may stop cancer from spreading.
Because of its perceived and proven health benefits, the demand for CBD as a product of consumption is increasing at a rapid rate, and this growth presents a golden opportunity for investors. So, how you can cash in on the CBD boom as an investor?
Why Consider an Investment in CBD?
Like all stocks, the growth of a stock share in CBD is not guaranteed, but several factors indicate positive potential market movement. According to Hemp Business Journal, recreational marijuana users are switching to CBD at a rapid rate. The demand for CBD has increased exceptionally with each state that legalizes the use of cannabis—not to mention all of Canada.
These trends are contributing to a compound annual growth rate of 11 percent, and it is estimated that growth in the stock market may increase to 700 percent by 2020. Additionally, many prominent role players are reportedly having success with their CBD oil investments.
How to Invest in CBD
Before investing in CBD oil, research the company, its success rate, hemp plant production, and extraction methods. Sustainable business operations are a clear indication of potential business growth. CBD companies that are worth considering include:
- 1933 Industries Inc. (TGIF:CNX)
- Aurora Cannabis Inc. (TSE:ACB)
- Golden Leaf Holdings Ltd. (CNSX:GLH)
- Isodoil Inc. (CSE:ISOL)
- GW Pharmaceuticals (NASDAQ:GWPH)
- Kush Bottles (OTCMKTS:KSHB)
- Terra Tech Corp (OTCMKTS:TRTC)
- Canopy Growth Corp. (TSE:WEED)
Ideally, you should also select a trustworthy investor that specializes in CBD stocks. There are two types of stocks, and it’s important to understand the type you are buying.
- A market order is a buy or sell order at the current market price.
- A limit order is a direction you give to your broker to buy or sell at a specific price.
After earning enough return from the stock you choose, you may want to sell. Consult with your broker before selling your stock to ensure that you follow all the rules of buying and selling CBD stocks and that you maximize your profit. It doesn’t always make sense to sell.
While there are plenty of CBD oil companies that are publically traded, there are also opportunities for investment in private, non-publically traded companies. Royal CBD is an example of a company that has received investment to fuel its growth, despite not being listed on any exchange.
Ethics of Investing in CBD Oil
Many investors associate CBD with marijuana and drug abuse. Because of ethical concerns, these investors are apprehensive about investing in CBD oil. If you want to invest in CBD, however, you can rest assured that you will not be contributing to social problems related to drugs.
Tetrahydrocannabinol (THC) is a cannabinoid responsible for interacting with receptors in the central and peripheral nervous system and triggering feelings of euphoria.
CBD is also a cannabinoid, and it has the same chemical structure as THC. However, it interacts with different receptors and doesn’t make the consumer high. Instead, it can have a wide range of health benefits.
Wrapping It Up
If you are considering investing in CBD oil, be cautious when evaluating potential investments, and stick to CBD business that can function in a regulated environment. Avoid fly-by-night businesses, regardless of whether they are privately held or publicly traded.
Currently, there is not a lot of clarity in terms of CBD oil regulation, but this is changing every day. If you invest in a company with access to capital, proprietary and popular products, and high-end quality control, you increase your chances of a successful investment.
Further reading: A description of cannabidiol, its current uses, and potential.