With CBD sales estimated to exceed $22 Billion by 2022, many investors are looking into different ways to get a piece of the action. It is in fact no longer an “alternative” investment, but will become a mainstream trend thanks to more relaxed legislation that has led to new markets opening up globally. Recently this article on investing.com provided an overview of some early-movers in the industry. Jeff Bezos is certainly not the only person that will profit from this rising trend in e-commerce – others are making giant strides to cash in on the next big thing. This is a critical junction where health and e-commerce converge. Now investors ask: What are my options for entering this vibrant sector?
Prudent options for CBD investing are available:
It is important to target US companies who can stay the course on providing GMT-certified cannabidiol. These companies and their products will have a good run on social proof and customer satisfaction – which is a key asset in today’s e-commerce environment. Avoid those seeking to make a quick return on products imported from Asia, where pesticides and contaminated soil risks the integrity of the product. As Edmon Mamane, the CEO of TerraVida Online said: “We invested much more on R&D and important quality certifications than most other countries. We do this not only to boost the reputation of our largest retail clients, but also to ensure that the end-user can have a safe, satisfying experience. It is also our contribution to the this key American industry”.
Back in the days when China was booming, famous investor Jim Rogers once said: “If you’re afraid to invest in China directly, then invest in companies who sell to China”. Well, with CBD and medical marijuana investing, there are even more innovative ways – all within the safe structure of the US economy and regulatory framework. Of the many ways in which investors can play this market, here are three to consider:
Invest in, or open an e-commerce business that sells CBD products:
For those who like owning and managing a business, there are numerous options. For example, once obtaining an agreement with a credible CBD dropship provider like TerraVida Online, it is possible to leverage their white-label solution and become a re-seller in a matter of days. A few thousand dollars can be invested into building an Amazon storefront, buying up smaller health websites that are not turning a profit. This re-seller route eliminates the need for expensive “franchise” type investments. It is a way to tap into this highly explosive market as a single investor or consortium of investors.
Invest in a publically-traded cannabis, medical cannabis or CBD company:
Investors who do not like to own and manage a business can always go down the route of stock investing – and to scan the market for stocks, ETF’s and retailers who are active in this segment. Look particularly at companies who export from the US to Europe and elsewhere around the world – and those who have a solid distribution chain within the US. This is more direct play with high exposure.
Invest in existing businesses that will add this product line
An alternative health company that did not previously sell mainstream pharmaceuticals, but that dabbled in products such as multi-vitamins will see the biggest jump in profits when adding product lines related to Hemp CBD oil. Any companies that confirmed they will become a re-seller of CBD products, with established e-commerce assets, can be a great target. Whereas Amazon may be the first thing that comes to mind, smaller fast-moving niche retailers may well produce a better yield. Physical retailers in shopping malls can also be a good investment.
Final scoop on CBD investing:
Whether or not you should invest in CBD depends on personal preferences. There is a high probability that CBD will take away business from mainstream pharmaceutical companies. This is because a plethora of illnesses such as depression, anxiety, skin problems (like psoriasis) and insomnia can be treated by it. There are many investment routes that can be plausible. Passive investors can invest in publicly traded companies, whereas active investors who want to be a part of the management process, can get involved in e-commerce themselves. The one thing that is certain, is that this is a mega trend that can be exploited. For those who are ready to embark on this journey, the only question is: how would you choose to participate?