Are you thinking about investing in some hemp stock?
These stocks have become very popular as marijuana legalization has swept the United States. Of course, we should make it clear that hemp is actually different from marijuana but often associated with it. While hemp and marijuana come from closely related plants, they are actually slightly, but importantly different. Still, the changing legal environment and societal attitudes towards marijuana is also benefiting hemp and thus hemp stocks.
If you’re looking for hemp stock news you’ve come to the right place. As with any good investor and wealth management analysts, we keep our eyes on hemp stocks. To be blunt, we suspect that investors in this market could enjoy some serious “green” in the near future, but risks are high.
Differences Between Hemp and Marijuana
So what is hemp? It is a plant closely related to marijuana but the plant itself does not contain much THC, which is the chemical that gets people “high,” or “stoned.” While hemp lacks the THC that makes marijuana a drug, it is very useful for making clothing, paper, and various other things. Compared to the harvesting of trees and other plants, hemp is also known for being sustainable. This has made it a favorite among people looking to protect the environment.
Hemp has generally fallen into a legal gray area because the plant does contain some trace amounts of THC. In theory, you could extract the THC to create a drug, but it would be cost prohibitive to do so. Still, because the plant often contains trace amounts of THC, many regulators has been frowning upon hemp.
Now, however, Americans are growing very open to marijuana itself. Marijuana is a similar plant to hemp. However, instead of using it to make paper and what not, people use it as a recreational drug, like alcohol. Marijuana contains very high levels of THC.
Marijuana Legalization
For decades marijuana has been illegal. Now, state governments have been making it legal for medical and even recreational use. Oregon, Alaska, Washington, the District of Columbia, and Colorado have all legalized the recreational use of “weed.” Numerous other states have legalized it for medical purposes.
This wave of marijuana legalization should also benefit the hemp industry and thus industrial hemp stocks. These are stocks for companies that engage in industrial-scale hemp activities, which can include growing, selling, and manufacturing products based on the plant. With the United States embracing hemp and all the products that can be produced with it, the industry could offer some hot investment opportunities.
High Risk Industry
Of course, we should warn you that hemp and especially marijuana is a bit of a high risk industry. Who knows how legal authorities will react to either in the future. For this reason, the risks associated with investments in this field will be higher than in other industries. Of course, when risks are higher, so too are the rewards. So if you invest in hemp inc stock, you need to keep both the risks and rewards in mind.
Opportunity for Growth
As far as global mega-trends go, we believe that the hemp industry offers a great opportunity for growth. Let’s consider some facts. The human population is growing. Global warming, deforestation, and other issues related to sustainability are becoming more and more important. Hemp is a sustainable plant that offers many benefits compared to harvesting trees and other similar alternatives. When you look at hemp from this mega-trend point of view, it starts to look like an attractive industry.
Riskier Pot Stocks, Higher Rewards
If you’re interested in this industry but would prefer to invest in even higher risk, higher reward stocks, don’t forget about marijuana stocks. When it comes to “pot stocks” the risks are very high because the Federal government in the United States, as well as numerous other national governments, still consider marijuana illegal. This means that Federal authorities will also view companies working in the field as illegal enterprises.
As we’ve already mentioned, however, where there is risk, there is reward. In this case, many investors have been avoiding marijuana because they don’t want to deal with the legal risks. Mind you, it’s highly unlikely the government will go after people who invest in marijuana or hemp stocks, but instead would go after the companies themselves. Since many investors are worried about these legal risks, the stocks could turn out to be great deals if governments do not end up pursuing legal action against the companies.
Interested in investing in industrial hemp stocks? If so, you should know that some of these stocks are traded over the counter, which can add certain complications to buying them. Make sure you check with your broker to ensure that they can handle OTC trades. If not, you may have to find a new broker, at least for your hemp and marijuana stocks. There are many great options out there for OTC trading, so make sure you consider all of the options.
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