Earlier today I posed a question on my Facebook page - "What do you think are the best investment areas in the cannabis industry right now?" I made sure to state ahead of time that I wasn't talking about any particular companies, because 'invest in this company' blah blah blah, it gets old. I was talking about areas or sectors of the marijuana industry that present good investment opportunities. To be very clear, I am in NO WAY an investor in anything, other than retro arcade games and consumable cannabis, and even then only on a personal level (up to 8 ounces legally in Oregon!). So take my opinion for what you will.
It's no secret that investor dollars are flooding into the marijuana industry at an ever growing pace, and there's no end in sight. The marijuana industry is exciting and full of potential, so it's understandable why everyone wants in. There are a lot of really, really crappy investments being made out there. Again, what do I know since I don't have anywhere near the dollar amounts that I read about being reported in investment articles, but I know a lot about cannabis and know people that know virtually everything about cannabis, and all of them have been scratching their heads at some of the things we talk about.
I think that a lot of people invest in the wrong things because they are new to cannabis, and think that just because something works in other industries that it will automatically work in the cannabis industry. That's not the case from what I've seen in the over 6 years I've been helping run this blog. Like I always say, marijuana is different. The consumers are different, the rules are different, societies view of the industry is different than it is for any other industry. There are so many nuances that it's impossible to compile a list of all of them, especially since they are almost all in flux and could be gone tomorrow. To say that the marijuana industry and world around it are evolving is a huge understatement.
My Facebook post resulted in a healthy conversation that is continuing. You can check it out at this link here. You will have to scroll a few posts down to see the particular one I'm talking about. Below are the best areas/sectors in my personal opinion to invest in or at least give serious consideration to if you are the type that is interested in that info. Of course, as always, if there's something that I missed or you think that I'm wrong or anything in between, feel free to add it in the comments section so that others can benefit from your knowledge. In no particular order:
Mandatory testing is going to be the standard going forward for the marijuana industry. Consumers and patients want to know what they are consuming, and governments are going to continue to require it for all products that are to be sold. There are some things in the marijuana industry that are going to be mandated across the board, and testing is going to be one of them. Everyone is scrambling to grow and/or sell marijuana and will have mixed success at doing so and have to compete with everyone and their grandma in doing so, yet not that many people are opening marijuana testing labs, which are going to be in huge demand in the future no matter what. I don't know what it takes to open a lab, but it's definitely something to consider.
There is a MASSIVE consumer base that many people don't think about when they think about the marijuana industry, and that's pet consumers. Well, I guess technically their human owners, but regardless, medical cannabis products are going to be huge in the future. Don't be confused, I'm not talking about feeding your pet flower or blowing hits in their faces - that's inhumane and can potentially cause a lot of harm to your pet. I'm talking about products specifically designed for certain types of pets. A dog doesn't have the same medical needs as a human, and a cat or rabbit has different needs compared to other animals. I'm not a veterinarian, so I don't know what animals need, but I do know that there are a ton of people that have pets (myself included!) and just as those pet owners consume marijuana themselves for wellness purposes, so too will many of them purchase cannabis products for their pets for the same reason(s).
Research And Development
Marijuana research is tough because of the rules regarding marijuana at the federal level. However, there is private research being conducted, and since the federal government has failed to step up to release its research in regards to cannabis, the private sector will step up and fill the void, and many of those involved in the research will benefit monetarily in handsome fashion. That's fairly standard for any industry when it comes to research and development, but marijuana presents arguably the most intriguing scenario since marijuana has been prohibited for so long and is such a versatile, beneficial plant.
I just read an article today about the billions of dollars worth of energy that the marijuana industry currently uses, and considering we are just barely scratching the surface, that number is likely to rise dramatically over the years. It's actually going to present a massive problem in the future, if it isn't already. Whoever figures out ways to conserve energy during the indoor marijuana growing process will make a ton of money I'd assume.
Growing marijuana on an industrial level almost always involves a large carbon footprint. There are some outdoor gardens that are all organic and largely mitigate their impacts on the environment, but there are tons more that don't. There are some that just don't care about the environment, but I like to think that most growers would love to reduce their impact on the environment if there were products and services out there that helped. I think that many people just don't know where to start and how to go about it.
Entertainment (Dear Rich Person(s) - Specifically A Cannabis Arcade)
For the love of all things that people with means consider holy, will someone just open a freaking cannabis arcade already!? If I had deep pockets, I'd have already opened a chain of them and would have been crushing it. I have ran this idea past hundreds of die hard consumers, and have yet to find someone that thinks that it's a bad idea. Well, there was that one guy that hated all video game playing with a raw passion, but for the most part, gaming and cannabis go together like, well, gaming and cannabis. If you don't know that by now, chances are you are that guy that cussed me out for 'spending too much time playing Nintendo.' Sir, with all due respect, I don't play Nintendo. But mainly because all of my controllers are broken right now, so I've been playing more Super Nintendo, and even then, that point is moot because I'm talking about a full fledged arcade. And not some Dave and Busters, 'grown up Chuck-E-Cheese' type arcade with nothing but newer driving games that charge outlandish prices for ridiculous game play. I want pinball games, and not just new ones, I want all the best titles. I want a to frequent a cannabis arcade that has flippers in full functioning order, with crisp joysticks on arcade games from the 80's and 90's in addition to stellar titles from the 2000's. I want to be able to hit a vape bag while crushing people at NBA Jams or Super Off Road. I want to take a dab hit while I'm in between races on Toobin' and all the while be surrounded by a fantastic setting that makes me long for the days when corny TV shows were popular. Rant over. If you need more info, e-mail me, I will go to my deathbed freaking out on people about this until it becomes reality. OK, rant now really over.
This will also likely end up on my followup article, investment pitfalls, but a solid, reputable consulting company is a solid investment. Consultants basically sell advice, and so when the selling price is high, it can be very profitable. There's absolutely a demand for consultants in the marijuana world, as navigating the constantly changing landscape is hard, especially for newbies. Even veterans have a hard time when it gets to the fine details. There's a fine line between success and failure in the marijuana world, and therefore there is a huge need for experts who can help provide the advice and expertise to ensure success. This is a rough investment area though due to so many sharks and scammers out there. Due your homework, and when you think that you have researched it enough, start from scratch and do your homework again. Only when you are absolutely positively certain should you invest in one or more people when the business is a consulting firm.
Someday home cultivation will be allowed almost everywhere, and it's a right that I think many citizens will exercise. I can legally grow four marijuana plants at my residence in Oregon, and I intend to start doing so soon. I have grown marijuana before, so I know how fun and rewarding it is, and since I'm doing it purely to consume and give away the harvests, I'm really looking forward to it. I know I'm not alone. I know a lot of people that either have their gardens going or have plans to get a garden going. It's like they say, the people that really got rich during the gold rush were those that were selling picks and shovels. Indoor garden suppliers are going to see a growth in demand that is virtually never ending, as are the product suppliers that stock their shelves. There are a lot of people that focus on industrial gardens, but home cultivation is going to be massive too going forward. Seeds and clones, greenhouses, and especially organic products are solid bets in the future in my opinion.
My buddy Sam pointed this out on my Facebook page today, and I couldn't agree more. I have heard of people paying three times the amount for square footage for a marijuana garden or storefront compared to what other tenants will pay, and they will pay it gladly. If you own commercial real estate, you probably already know what I'm talking about. If you don't own commercial real estate but have the means to swoop some up and market it to the cannabis industry, you need to get off the fence and get into the ring because the cannabis industry real estate market skillet is HOT right now.
I would add apps to this category, but as with most industries, any revolutionary software, app, or other technology that can be brought into the industry will generate huge profits. The industry is massive, and getting bigger everyday. If you can invent some type of software or app that can help every store owner, or every cultivator, or every consumer, you will make enormous sums of money. Just make sure that your idea doesn't involve 'find marijuana in your area' type concepts. There are about a million of those out there already!
As I always do, I will give you the pitch to invest in activism. If you are reading this article, chances are you have some means. And if you have read the article all the way to this point, then I'm hopeful that you will continue to read the rest of this paragraph. INVEST IN ACTIVISM! And don't do it in a profiteer way. Do it because if you are trying to get into this industry, or are already in this industry, you need to be an activist by default. Whether you like it or not, or want to admit it or not, you are a target for marijuana opponents in the government, in politics, in industry, and in society. If you are looking for some great efforts to support, by all means e-mail me and I'd love to point you in the right direction! If you are just in the industry for the money, and don't care about social justice, know that you are lame and no one likes you and you will someday (hopefully soon) be known as the cannabis version of Pharma Bro.
It's worth noting that the the title to this article refers to the NOW, and doesn't refer to FOREVER. Things change in the marijuana world rapidly, so what might be a good investment area today might be awful tomorrow. Due your homework, and make your decisions based off of your own homework, and not that of a weed blogger or anyone else unless they are absolutely qualified and proven!