Currently, it is possible to invest in marijuana companies without “knowing someone” in the business. And even though cannabis remains illegal on the Federal level, there are companies that investors can buy stock in.

As with all kinds of business there are a few different types of companies within the industry you can invest in.

• Cannabis growers and retailers: These companies, which include Canopy Growth and many others, cultivate cannabis (often in indoor facilities and greenhouses), harvest the crops, and distribute the end products to customers. Some also focus on operating retail stores for selling medical and/or recreational cannabis.
• Cannabis-focused biotechs: These are biotechs (such as GW Pharmaceuticals) that focus heavily on developing cannabinoid drugs.
• Providers of ancillary products and services: These companies support marijuana growers by providing products and services such as hydroponics products and lighting systems, a key area of focus for Scotts Miracle-Gro; packaging solutions; and management services.

Then there are international companies that one can invest in, including Canadian companies. Cannabis became legal for recreational use in Canada in 2018 and is regulated much like alcohol.

Because cannabis remains illegal on the Federal level there is no guarantee that the Department of Justice will not change their de facto hands off approach to cannabis companies and banks in states where it is legal and pursue prosecutions. One also must remember that cannabis companies may only operate in their own state, so the market of the company is limited to the market in that state.

If cannabis sounds like an interesting addition to your portfolio it warrants a visit with an investment advisor.