High Risk? Cannabis Sector’s Legal Conflict Puts Investors in Haze

Though the cannabis sector has matured in recent years, navigating the still murky legal environment surrounding marijuana stocks might be enough to leave many investors feeling a bit dazed and confused.

For starters, marijuana remains illegal on the federal level in the U.S., even though there has been a legalization push from a growing number of states. That difference can make it pretty easy to get lost in the weeds as the regulatory environment continues to take shape.

When it comes to investing in marijuana and cannabis companies, there can be more to think about than simply assessing the fundamentals of stocks you might want to buy.

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With plenty of question marks around the federal stance, it can be hard to assess the risks of federal illegality to investments, noted Brent Johnson, CEO of Hoban Law Group.

“The risk structure is definitely more dramatic than a non-cannabis investment,” he added.