As the conservative world turns out to be a bolder and more curious environment, more and more discoveries are introduced to the public as an alternative to enjoy and protect our lives. And because of this trend, several US states have legalized the use of cannabis or marijuana for medicinal purposes. This may not be new information for you but if you are fascinated to perfect the craft of trading CFDs, you might wanna spend some of your time to read how the controversial medical marijuana is able to help you get profit. In this post, we will lay down some facts regarding medical marijuana as well as the advantage and risks of trading with this kind of merchandise.
What is Medical Marijuana?
In the field of medicine, doctors and researchers have discovered that marijuana plants despite their addictive content have the ability to cure several diseases. At present, this plant is still considered illegal in some countries around the world but the US government has allowed its usage in some parts of the US including the District of Columbia.
How profitable is Medical Marijuana Stocks?
You may find it weird but we are telling you that trading CFDs is possible via stocks for medical marijuana. That’s right, the moment you involve yourself into this platform, you get to enjoy higher leverage than other merchandise.
Expected Risks when Trading Medical Marijuana
Due to the legalization of medical and recreational marijuana in some parts of US, trading and investing on cannabis stocks may pose risks on the following areas:
By tracing the government’s reaction towards the management of areas where marijuana is legalized vs those that haven’t recognized its medical potentials, there is a great possibility that the US government will prosecute marijuana-related businesses unless the revision of US Federal Laws.
- Banking and Finance Services
In the eyes of the Federal Government, trading marijuana still remains illegal that is why it is hard to find a bank that wishes to involve itself into the trade. Considering this issue, a bank that is believed to be dipping its hands into the cannabis industry is prone to money laundering and stealing accusations. Consequently, cannabis trading companies face the challenge of expanding their business.
3 Tips to deal with Cannabis Trading Risks
1.Purchase low risk marijuana stocks
Aside from the US, there are other countries where the medical as well as the recreational value of marijuana are recognized such Canada and Uruguay. Expert traders and financial advisers recommend investing in marijuana stocks that are based in these countries to lessen or eliminate the US based risks for marijuana related businesses.
- Purchase company stocks whose main business is outside cannabis industry
There are companies that are known to have subtle moves when it comes to the marijuana industry. Some highlight their gardening or liquor businesses such as Scotts Miracle-Gro and Constellation Brands. Choosing to deal on stocks with this nature towards the cannabis industry may be safer than choosing outright cannabis shares.
- Purchase Marijuana ETFs
ETFs are investment funds containing a basket of securities that can be traded like a single stock. The purchase of this type of instrument poses greater chances of earning better than having individual stocks in your account.
The trade for medical marijuana has been observed to have undergone a visible change over the years.In connection with the increasing number of areas or countries where the positive effects of medical and recreational marijuana are recognized, several investors and health experts find interest in products that contain common cannabinoids such as THC or CBD. And because of this trend, cannabis related shares are vividly exposed to volatility and price swings which makes it a good venture for CFDs and ETF traders.