CBD Stocks: Everything You Need to Know

Alexandra Campbell • February 22, 2019 • About CBD, FAQ

Cannabidiol, better known as CBD, is booming in a number of industries. Due to its many presumed health benefits, it took no time at all for the health and wellness sector to jump on the CBD bandwagon.

Local and online health food stores and vape shops are taking notice of CBD’s rising popularity and are monopolizing on it as well–many of them selling a slew of different CBD products such as edibles, oils, topical treatments, vape juice, and many more.

One industry that should be considered regarding the explosion of CBD is the financial industry and the stock market. CBD stocks are something to pay attention to.

While this tendency to overlook the market might be natural for those uninterested in economics, stocks, investments and the like, understanding CBD stocks is essential to understanding the future of CBD. It’s almost 2019, and the stock market is no longer reserved just for rich white guys in suits.

We can all get a piece of the pie by committing to involvement and by building a knowledge base around CBD stocks and the stock market in general. For those of us who have experienced the many healing powers of CBD, we’re in a potentially advantageous position to benefit financially as well from what is projected to be a multi-billion dollar industry before it goes entirely mainstream.

Before exploring CBD stocks any deeper, let’s refresh our memory about what CBD is, how it works, and why it’s so popular in the first place.

What is CBD?

CBD, also known by its scientific classification, cannabidiol, is one of more than 100 naturally occurring elements of the cannabis sativa plant. CBD’s connection to wellness and its status as a potential holistic alternative to many traditional treatments is making the chemical compound a household name.

More specifically, CBD and cannabinoids have the potential to remedy an extensive and growing list of ailments and symptoms such as ADHD, acne, anxiety, cancer- and chemotherapy-related symptoms, depression, epilepsy, insomnia, multiple sclerosis, obesity, and many more. More research is currently underway to provide more conclusive data, but early studies show great promise.

So if CBD is becoming so popular, now could be a good time to invest. If you’re thinking to get in on CBD stocks relatively early in the game, how do you do it?

Basics of Investing

Becoming an investor isn’t as scary as it appears. If you’re uncertain about what it means to be an investor or how to start investing, it’s helpful to know the basics. Certain apps, such as Stash, are also profoundly helpful for those just starting off.

First, consider three of the most typical kinds of investments: bonds, mutual funds, and stocks. Buying a stock means buying a share of the company at hand. Depending on the company’s financial health and the state of the economy, stock prices will ebb and flow. Your stock investment will be subject to those fluctuations.

Buying bonds is a little bit different. Rather than owning a small piece of the company, like with a stock, a bond is a way for you to “lend” money to the company or organization at hand. The company will then use that money however they see fit and pay you back over time with interest.

Mutual funds, which are especially useful for novices, are investment arrangements handled by experts. The program’s funds come from stockholders who trade and diversify holdings for you. The word “diversify” in investment language simply means having a mixed bag of various assets, usually including stocks and bonds.

If you’re interested in investing in CBD, stocks are your most likely target.

Investing in CBD

Whether you’re a veteran investor, are just starting out, or are somewhere in between, it’s important that you have a working knowledge of the type of stocks you’re investing in, especially when it comes to CBD stocks.

CBD stocks fall most comfortably under the “marijuana industry,” which is gaining traction in the investment world. However, many investors remain wary about adding CBD stocks and other marijuana-related assets to their portfolio.

Investors’ hesitancy in buying CBD stocks comes from the generally risky nature of the marijuana industry. This is due in part to marijuana’s uncertain legal footing.

If you have your heart set on investing in the understandably risky marijuana industry despite its economic climate, there is one way you can feel safer in your purchases. To feel safer in your potential investments in CBD stocks, equip yourself with all of the knowledge you that relates to CBD stocks and the marijuana industry in general.

Educating yourself about investing is necessary no matter which type of stocks, bonds, or other assets your interested in. Before you make an investment in CBD stocks, learn about the market, the product, and the companies you plan to invest in.

CBD Stocks

One of the chief factors as to why CBD stocks are gaining notoriety is that the U.S. is becoming more accepting of the legalization of medical marijuana. The majority of people would like to see medical marijuana be legal in every state.

How does this social climate play into CBD stocks? Well, as people become more accepting of marijuana, they will likely become more accepting of CBD. Over half of Americans, in fact, support marijuana legalization.

This shift in perspective about marijuana is especially inspiring considering that, unlike THC, it won’t create a high. This particular quality of CBD makes it a much easier pill to swallow for those on the more traditional side of substance-related laws.

Where to Invest

One option for investing in CBD stocks is the more established company, Charlotte’s Web (OTCMKTS: CWBHF). Charlotte’s Web played a big role in the CBD craze and was one of the first of its kind to gain notoriety. Some market watchers are suggesting to keep an eye on this ground-breaking company based on its highly profitable and scalable operations as well.

Market analysts also suggest to watch out for CIIX (chineseinvestors.com, Inc.), a Los Angeles based company which has some potential to make waves in the stock market and whose market cap is $16.65M with a current share price of $0.51. Learn more about chineseinvestors.com here.

Another company that’s potentially worth investing in is Elixinol (ELLXF) which, although in its infancy, has a global CBD play with an aggressive expansion plan in the U.S. with sizeable revenue in place.

Aphria Inc. (U.S.:NYSE) is currently noted as a stock worth investing in at the moment. Before doing so, remember to do your research as we mentioned above. Aphria Inc. is known for its extraction and distribution of CBD oil and their sights on varying global markets.

If you’re new to investing, it’s worth the time and effort to look into best practices and to be aware of the risk involved with investing in CBD stocks. Your best bet is to keep a lookout on the market and keep informed about trends so that you have a better chance of making informed decisions about which CBD stocks you might want to invest.

Most importantly, remember that by its very nature, the stock market fluctuates. In the recent past, marijuana-related stocks have been down. However, that certainly doesn’t mean that they will stay down.

Final Thoughts

Mainstream marijuana is a young, unpredictable business. This stock is a high-risk, uncertain capital open to legal and regulatory ambiguity. Contemplate how your investment in this stock may be treated under any laws you may be affected by, which includes policies related to your job.

Perhaps the most “risky” facet of CBD stocks along with other marijuana-related stocks is that these stocks are inherently volatile. Their volatile status has nearly everything to do with the fact that marijuana is still federally illegal, though hemp, from which most CBD is derived, is legal on a federal level. Don’t put any money into it that you’re not prepared to lose, and make sure to do thorough research on the companies you’re investing in.

Keeping those points in mind, CBD stocks may be worth investing in. It is expected to grow massively as an industry within the next few years, and if you’re willing to take the risk, it may very well pay off.