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High Risk Yields High Rewards: Choosing How to Invest in the Cannabis Industry

It’s 1997. A couple of young grads at Stanford create a search engine with a wacky name called
“Google-” a play on the mathematical numeral googol. Those who were intuitive
enough to envis

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[dropcap class=”kp-dropcap”]I[/dropcap]t’s 1997. A couple of young grads at Stanford create a search engine with a wacky name called “Google-” a play on the mathematical numeral googol. Those who were intuitive enough to envision the potential invested in the fledgeling website. Investors eyeing the cannabis industry also have an enormous opportunity on their hands— if they’re brave to go through with it.

Bloomberg capped the cannabis industry at $3 billion in April 2015, with half coming from big pharma research. Financial analysts predict the industry will reach a worth of $15.2 billion by 2020. Investors are coming out of the woodwork and they want to know where to double down.

CNBC reported that companies like PayPal have upped the ante by investing in companies that handle the actual cannabis production. Last January, PayPal co-founder Peter Thiel and his Founder’s Fund took a stake in Privateer Holdings. Privateer Holdings runs a medical cannabis grow operation in Canada as well as Leafly and Marley Natural. Investing in companies like grow operations that handle cannabis reap the best rewards. Privateer Holdings CEO Brendan Kennedy says, “There will be significant financial returns for people who are smart.” By the letter
of the law, it’s illegal to invest in actual cannabis under federal law. The high rewards do not come without risk.

New Frontiers provides data collection and support for those interested in investing in cannabis start-ups.  New Frontiers co-founder, Rick Gilchrist, suggests investing in ancillary businesses if you want no risk of jail time. For example, app start-ups are popping up everywhere and their potential is limitless. Also, investing in an existing company saves you the trouble of establishing a license. Cheryl Schuman, a public relations expert said, “Investors want to see if an influencer, a trendsetter, a cutting edge individual gets involved… The people who are strong enough and smart enough to take those risks, will be the billionaires of 2016 and beyond.”

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