Canada’s nationwide legalization of cannabis has led to some interesting new opportunities for investors. Likely best known of these is that a number of major cannabis companies are now listed on the Canadian Securities Exchange.
Staking out positions in publicly traded companies of any kind, though, necessarily means becoming subject to all the associated restrictions and limitations. Investors who seek to maximize their returns often find it makes sense to look for opportunities in other places.
Among the most popular alternative assets in cannabis friendly portfolios at this time are shares in private equity projects. As the vast majority of the most promising cannabis companies in North America have yet to become publicly traded, private investments can be some of the most rewarding of all.
Private Equity Makes Sense for Many Cannabis Focused Investors
Being ready to invest in cannabis companies is most common among relatively sophisticated investors who have some tolerance for risk. The industry is still volatile and emergent enough that it generally takes a bit of gumption and grit to succeed there as an investor.
Those facts also mean that many investors who are interested in cannabis companies are also good candidates for private equity projects. Contributing to a private equity investment fund that focuses on the cannabis industry, in fact, can prove to be a great way to raise the bar for potential returns even higher.
The most important reason for this is simply that private owned cannabis companies can still feature valuations that have not been fully informed by activity on the open markets. Private equity experts who are adept at identifying businesses which are undervalued by their owners can help investors secure impressively large returns.
Diligence and Discipline are Still Required
Naturally enough, investors who decide to become involved in private equity funds that focus on the cannabis industry will always need to do plenty of research. That can be somewhat more difficult than buying stock on the public exchanges, as the required information will not always be as readily available. Even so, investors who stick to their guns and commit to vetting every opportunity before them can find private equity to be a great way to become involved with the cannabis industry.