With the growth of the cannabis industry in legal states, and the inevitable move towards full legalization on a nationwide level, people are starting to think and talk seriously about investment opportunities in the world of legal marijuana. And it makes sense - like those who had the opportunity to invest in the first sodas, alcoholic beverages, and cars, we are poised on the brink of being able to put our money into something that has the potential to make us millions. But how risky is this new opportunity, and how does one go about investing in this brave new world? We have provided an outline of how people are getting involved in this, as well as the dos and don’ts of cannabis investing.

The first thing to understand is, it is a risky undertaking to invest in cannabis. The substance is still federally illegal, and that may not change any time soon. As a result, many companies are still private, and people are uncertain about sinking their money into something so volatile. Last year, the Financial Industry Regulatory Authority (FINRA) issued a warning about potential fraud and “pump and dump” schemes, which, according to cheatsheet.com, are schemes that involve situations where “fraudsters lure investors with aggressive, optimistic — and potentially false and misleading — statements or information designed to create unwarranted demand for shares of a small, thinly traded company with little or no history of financial success (the pump). Once share prices and volumes reach a peak, the cons behind the scam sell off their shares at a profit, leaving investors with worthless stock (the dump).”

Additionally, the fact that their are only four states in which cannabis can be bought and sold completely legally, instead of just medically, makes people nervous about taking this plunge and sinking money into such a grey area. People are worried that the new presidential administration in 2016 could pull the plug on legalization entirely, or at least make things much more difficult for those with money invested, although by that time the legalization movement will undoubtedly have gained even more ground.

Still, as is always true with investing, there is no reward without risk, and sometimes going out on a limb with  a new investment can have great pay-off, as long as you are careful. There are a fair amount of over-the-counter, pink sheet stocks currently available for the cannabis industry, and some bigger name investors and pharmaceutical companies are starting to come out as supporters. While these are usually just small stocks and there is a large risk involved, this is a good place to start for potential investors.

So far, stocks are available from several companies, including Medical Marijuana Inc., Medbox Inc., and Rapid Fire Marketing, Inc. To find more info about these stocks, you can check out marijuanastocks.com, or check Marijuana Stock Report here on Weed Depot once it becomes available.

Another way to get into investing in cannabis that may be a bit less risky is to invest in hemp. As silly as it is, hemp was made illegal in a lot of areas right alongside cannabis, even though this cannabinoid cousin has no psychoactive qualities whatsoever - you couldn’t get high from it if you tried. Hemp is also on the fast track to being accepted legally, and since there are no intoxicating qualities, it is more likely to go through. There is also a huge demand for making products out of hemp, with none of the associations of supporting what used to be an illegal drug.

There is no doubt that this is a bold new frontier, and as such there are undoubtedly mistakes to be made, and there is money to be lost. However, there is no reward without risk, and there is also a great deal of money to be made from this type of smart and forward thinking investing.