{"id":286763,"date":"2019-10-16T16:28:21","date_gmt":"2019-10-16T21:28:21","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/cannabis-law\/cannabis-laws-and-regulations\/marijuana-investment-legal-information-about-marijuana-stocks.html"},"modified":"2023-09-08T13:22:40","modified_gmt":"2023-09-08T18:22:40","slug":"marijuana-investment-legal-information-about-marijuana-stocks","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/cannabis-law\/cannabis-laws-and-regulations\/marijuana-investment-legal-information-about-marijuana-stocks.html","title":{"rendered":"Marijuana Investment: Legal Information About Marijuana Stocks"},"content":{"rendered":"\n
\n \n
\n

Marijuana Investment: Legal Information About Marijuana Stocks<\/h1>\n
\n
\n By FindLaw Staff<\/a> | Legally reviewed by Amber Sheppard, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

\n
\n
\n

Key Takeaways<\/h2>\n

The most notable risk associated with this business is that possession and sale of marijuana remain illegal under federal law<\/u><\/a>. This means the federal government can prosecute<\/u><\/a> marijuana businesses and dispensaries operating in states where adult-use cannabis is legal. In other words, by investing in a marijuana company, you are investing in a business that faces the risk of prosecution.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n

Business owners have the opportunity to invest in and become a part of the marijuana industry as states continue to shift toward legalization. More than two-thirds of states allow some form of medical marijuana as of 2023, and almost half have legalized recreational marijuana. As cannabis sales grow, new business owners have plenty of opportunities to invest in and become a part of the cannabis market.<\/p>\r\n

But this business comes with its own risks, mainly since cannabis is still illegal at the federal level. Although the Biden administration has backed off from prosecuting marijuana businesses at the federal level, this can change with a new administration.<\/p>\r\n

How Can I Invest in the Marijuana Industry?<\/h2>\r\n

As is the case with any investment, you need to do your due diligence before investing in marijuana stocks. Among other things, you need to understand the cannabis product in which you are investing and the regulatory differences among categories like medical cannabis<\/a>, recreational cannabis, and CBD. You should also consider the cannabis company’s growth potential and the market cap of the company’s shares.<\/p>\r\n

Marijuana Stocks<\/h2>\r\n

Marijuana companies in the U.S. and Canada began listing on Nasdaq<\/u><\/a> and the New York Stock Exchange<\/u><\/a> in 2018. Many businesses have now opted to go public and have made their shares available for sale on the stock market. This means investors can purchase stock in publicly traded cannabis companies.<\/p>\r\n

There are three primary types of cannabis stocks:<\/p>\r\n