Medical cannabis: investment prospects

In recent years, cannabis has become a sustainable product in the market, which is actively used in the medical, agricultural, beauty industry, etc. sectors, as well as providing new investment opportunities for entrepreneurs. 

 

According to New Frontier Data's 2021 global report, the value of the global cannabis market, both regulated and unregulated, is estimated at $334 billion. And by 2024, this amount is expected to increase by another $100 billion. 

 

Due to the high demand and prospects, more and more countries are starting to move towards legalizing cannabis. The use of cannabis for all purposes is legal in Uruguay, Georgia, South Africa, Canada, and Mexico. Nineteen US states, including Washington, California and New York, allow the recreational use of cannabis. Thirty states allow the use of cannabis herb for medical purposes. In 2017, the US National Academy of Science, Technology and Medicine proved the effectiveness of cannabis in treating epilepsy, Parkinson's and Alzheimer's diseases.

 

 

Is medical cannabis a lucrative investment option? Let's look at the direction's potential for investors.

The investment potential of medical cannabis

The medical cannabis market has tremendous growth prospects, this is proven by an annual increase of over 25% and even more inspiring projections from global auditing and investment firms. In the long term, the cannabis industry could grow to $200-500 billion, according to Canopy Growth and a CNBS report.

 

 

The medical cannabis market has now professionalized and become a multi-faceted business with investment opportunities in production, extraction, and distribution of the product. Investors who want to get involved in the development of this industry are met with a host of opportunities.

 

It is not only possible to buy shares directly from major stock exchanges, but also from exchange-traded funds such as Horizons Marijuana Life Sciences, ETFMG Alternative Harvest, to take part in private companies through venture capital funds (Benchmark, Base Ventures) or to invest through crowdfunding platforms. 

 

Aurora Cannabis also issues bonds in addition to equities. This gives investors the opportunity to diversify their portfolio by adding a stable asset with a guaranteed return. 

 

Financial news provides anecdotal evidence that cannabis stocks are a good investment. For example, the Toronto Stock Exchange's list of the most profitable stocks in the top 10 includes two cannabis companies:

 

- Canopy Growth with a yield of 1,823%;

- Aphria with a return of 479%.

 

Thus, we can see that the industry is growing strongly and will continue to grow in the coming years. 

Benefits and risks of investing in medical cannabis

The success of an investment depends on how deeply an investor is aware of the benefits and risks of the direction. Investing in medical cannabis comes with the following benefits. 

 

+ Variety of investment options. The market for medical cannabis is vast. Investors can invest in full-cycle cannabis companies as well as in individual areas of production, extraction, or distribution of the product. In addition, medical cannabis is used for medicinal purposes as well as industrial, nutritional and cosmetic purposes.

 

+ The market is booming and growing financially. According to the Associated Press, investors invested more than $10 billion in the marijuana industry in North America in 2018. And average share gains for cannabis companies are up +710.69% over the past five years. 

 

+ Supporting and improving the global economy. According to research, the cannabis industry will grow to 330,000 jobs by 2022, rising to one million by 2025. New jobs aren't everything. The average wage in the cannabis industry is 10% higher than in other industries. If cannabis herb becomes legal at the federal level, the countries' economies will improve dramatically. A report from analyst firm New Frontier states that by 2025, marijuana could generate an additional $105.6 billion in tax revenue.

 

+ A steady increase in demand for medical cannabis. With each country legalizing the medical use of cannabis, the demand for the product increases. In 2021 alone, demand exceeded supply by more than three times, and this figure continues to grow. Which creates additional earning opportunities for companies and investors alike.

 

But despite all these benefits, there are also risks that accompany investing in the medical cannabis field. 

 

- Limited research on the effectiveness of medical cannabis. Although some research has been conducted on the therapeutic effects of cannabis, more research is needed on the potential benefits and risks of cannabis products.

 

- Limited information on companies in the market. Most of the companies operating in this industry are small companies about which there is little information and research. This is accompanied by low market liquidity, particularly in the US market, where most cannabis stocks are still traded on the OTC market.

 

- Legal obstacles. Although cannabis is becoming increasingly legal, it is not legal to invest in cannabis in all countries. Therefore, it is very important that in addition to the technical analysis for the investment, a fundamental analysis of the legality of such investments in the countries where the investor is located is performed.

How do I invest in medical cannabis?

Investing in cannabis involves buying shares in companies that manufacture the product. These can be companies that produce it, are involved in its extraction or distribution. There are also ancillary companies that provide logistics, transportation, and packaging services for the finished product.

 

The best and most profitable option is to invest in full-service medical cannabis companies. That is, organizations that are involved in both production and extraction with distribution.

 

One such company is S-Pharmaceutical. It is a group of vertically integrated companies in Switzerland in the cultivation, processing, production and distribution of sales of high CBD cannabis. 

 

One unique feature and innovative solution is the use of DAO (Decentralized Autonomous Organization) as a tool for organizing investment activities.

 

DAO is a tool, program code, which is implemented on a blockchain, works autonomously according to pre-specified and agreed conditions and is implemented using smart contracts. The terms in DAO are fully transparent to all participants and are stored in the blockchain on thousands of different devices. Unlike traditional contracts, they cannot be tampered with, circumvented or somehow defaulted on.

 

The DAO is the issuer of TokenShares, a crypto-asset that will be held by the companies' partners. This crypto-asset allows its owners to receive dividends in hard currency, which is a liquid asset in dollar terms. TokenShares is part of a vertically integrated group of companies, which makes it secure and ultra-liquid. 

 

Join S-Pharmaceutical and become the first in Europe's new market.