Steven R. Gormley - Investing in Cannabis for Dummies

Investing in Cannabis For Dummies

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Copyright 2021 by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

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Library of Congress Control Number: 2020952057

ISBN 978-1-119-67476-4 (pbk); ISBN 978-1-119-67478-8 (ebk); ISBN 978-1-119-67474-0 (ebk)

1. Chapter 5

1. Chapter 3
2. Chapter 4
3. Chapter 8
4. Chapter 9
5. Chapter 10
6. Chapter 11
7. Chapter 13
8. Chapter 16

Based on a report published in 2020 by Grand View Research, the global legal marijuana market, valued at US$17.7 billion in 2019, is expected to expand at a Compound Annual Growth Rate (CAGR) of 18.1 percent, to be worth US$73.6 billion by 2027. That represents incredible growth and explains why the push by many entrepreneurs and investors to capitalize on this growing market is often referred to as the Green Rush (comparing it to the California Gold Rush, which lasted from about 1848 to 1855).

The trouble with any rush, whether green, gold, or no color at all, is that its often accompanied by chaos, uncertainty, and failure what former U.S. Federal Reserve Board Chairman Alan Greenspan called irrational exuberance. Sure, some people got rich during the Gold Rush, as will some people during the Green Rush, but most prospectors during the Gold Rush went from boom to bust, many without experiencing the boom. Likewise, until the cannabis market stabilizes, many businesses will fail, many investors will lose their shirts, and many con artists will scam unsuspecting investors and business owners out of millions, if not billions, of dollars.

To profit from cannabis as an investor, you really need to know what youre doing. You need to know the industry, know how to find leads on potentially profitable investments, be able to size up a businesss potential for earning a profit, and have the knowledge and skills necessary to reduce your exposure to risk.

Welcome to Cannabis Investing For Dummies, your personal guide to investing in the cannabis industry profitably and without losing your shirt. Of course, I cant guarantee either of those outcomes (making gobs of money or not going broke), but as an expert in the legal marijuana sector, I can show you how to find and research cannabis investment opportunities in a way that increases your chances of earning a profit while reducing your chances of investing in a lousy business or getting scammed by savvy con artists.

To make the content more accessible, I divided it into five parts:

• , Getting Started with Cannabis Investing, brings you up to speed on the basics of investing in cannabis, introduces you to the different types of businesses you can invest in, and discusses numerous factors that can impact a businesss ability to turn a profit. Here, I also lead you through the process of weighing the pros and cons of investing in cannabis, so you know what youre getting into before getting into it.
• , Doing Your Homework, provides guidance on how to find leads on potentially profitable cannabis companies, and then research those companies and their management teams before investing in them. Unless youre going to base your entire investment strategy on luck, this part is essential reading.
• , Buying and Selling Cannabis Stocks, ETFs, or Mutual Funds, gets down to the basics of trading securities in cannabis businesses. If youre already an experienced investor who has bought and sold securities on the stock market or youre working with a qualified broker, this may be optional reading for you.
• , Exploring Cannabis Investment Strategies, presents different strategies for earning a profit by investing in cannabis businesses. Buy low and sell high, right? Well, generally speaking, thats certainly the goal, but this part breaks down that overarching strategy into more practical steps.
• , The Part of Tens, features four top ten lists: ten ways to profit when the market drops, ten reasons not to invest in cannabis, ten criteria for choosing a cannabis business to invest in, and ten common mistakes to avoid when youre just getting started.

In short, this book serves as your guide to investing in cannabis profitably without getting scammed by clever con artists or overhyped investment leads.

All assumptions are foolish, and Im always reluctant to make them, but to keep this book focused on the right audience and ensure that it fulfills my purpose in writing it, I had to make the following foolish assumptions about you: