Investors are feeling bullish about the cannabis industry, according to a new survey released by KCSA Strategic Communications. Titled the Cannabis Investor Survey, KCSA polled over 250 retail cannabis investors about their investments and outlook on the legal cannabis industry in the United States.
Of those surveyed, 51% have a net worth between $100,000 and $500,000 while the other half (49%) have a net worth over $500,000. According to the survey, 90% of retail investors are making money off of their stocks, and 40% say that they own stock in 10 or more cannabis companies. Roughly 50% are pulling money from other investments to invest in cannabis.
“Cannabis has graduated from being viewed as a high-risk, exotic or fringe investment, to a mainstream staple of retail investors’ stock portfolios,” said Todd Fromer, Managing Partner at KCSA Strategic Communications. “Our survey suggests that individual investors are selling their positions in traditional stocks in order to invest in cannabis stocks.”
While some may see cannabis as a way to make quick money, most retail investors say that they are in it for the long run. Approximately 80% of respondents say that they plan to hold on to their investments for between 1-10 years. Nearly half of those surveyed (40%) say that cannabis makes up more than a quarter of their overall investment portfolio.
Though cannabis remains a Schedule I controlled substance, most investors don’t seem to mind. Roughly 84% of respondents say that cannabis’ federal status has no impact on their decision to invest. Retail investors are also unafraid to invest in cannabis companies that touch the plant.
Approximately 44% say that they are invested in a medical cannabis company and 40% report to have investments in adult-use cannabis. While hemp-CBD may be the hottest thing in the health and wellness market, 37% of respondents have investments in the sector. Despite the legal benefits of investing in ancillary cannabis companies, only 24% have a financial stake in one.
The takeaway from this survey is that investors are exceedingly confident in the long-term success and stability of the cannabis industry. Instead of cautiously putting money into ancillary companies, most retail investors seem to be diving head first both adult-use and medical cannabis while shying away from “safer” investments. According to Lewis Goldberg, a managing partner at KCSA, that trend will only continue.
“Cannabis investors appear unafraid,” says Goldberg. “As they continue to invest without fear of federal illegality of cannabis and without concern regarding companies that touch the plant, we expect this sentiment will only grow as more and more states expand medical programs and pass recreational use laws.”