First-time investors in marijuana penny stocks usually think they have to buy shares of companies that grow or sell cannabis, but that's not true. A major "backdoor" investing strategy in pot stocks is in the emerging real estate sector.
Right now, 29 states and the District of Columbia have legalized medical marijuana. Looking ahead to 2018, there are already 11 more states that could put marijuana initiatives on their ballots. The issues could range from decriminalization to recreational legalization.
As marijuana legalization spreads across the country, more cannabis businesses will need to buy and lease space to operate.
That's why we're giving readers more details about two marijuana real estate stocks on our radar.
These aren't firm recommendations since cannabis is still illegal under federal law, which makes them speculative investments.
Rather, these are pot stocks to watch as more states legalize cannabis. More than half the country has legalized medical marijuana, and full legalization isn't far behind with recreational cannabis use legal in eight states.
To see just how hot the cannabis real estate market is right now, we turned to two experts...
What the Experts Are Saying About the Marijuana Real Estate Industry
Residents of California voted to legalize recreational cannabis use in November 2016, and sales and leasing prices are rising in Southern California, according to Jimmy Moore.
Special Report: Cannabis Is the Gold Rush of the 21st Century - 30 Stocks to Invest in Now. Details here...
"As a real estate agent in the Southern California market place, I'm seeing properties in the green zone rising in both sale and leasing price," said Moore.
The "green zone" is where cannabis companies are allowed to operate legally.
"Property owners are now feeling more comfortable leasing to growers and dispensaries so long as the city or counties are on board with it.
"I'm also seeing a rise in the amount of interest from average clients for REIT's in the green zone. In my opinion, the market for green properties is only going to grow in demand as we move forward," Moore said.
For risk-averse investors, owning a marijuana real estate stock is a "safer" way to play the booming $6.7 billion legal North American industry.
But real estate is still an overlooked market for marijuana investors despite the growing demand for leasing space for cannabis companies to operate, according to Jamie Schau.
Schau is the senior analyst for Brightfield Group, a cannabis-focused market research firm providing accurate and comprehensive consumer, brand, and market insights in the industry, offering a critical edge in a quickly emerging and competitive market.
"Many looking to dive into the cannabis market turn to opportunities in cultivation and sales, investments that can face several barriers to their success, such as fierce competition and supply chain challenges," said Schau.
"For those looking to profit off marijuana's tremendous growth while avoiding these hurdles and risks, however, there are excellent (often overlooked) prospects in cannabis-related secondary services, particularly in real estate.
Marijuana Businesses Are Teaming Up with This Billion-Dollar Industry
"As the cannabis industry continues to expand around the U.S., canna-businesses will inevitably need more property for their operations, and real estate entities prepared to offer them space and venues - especially those who can adapt to these businesses' unique needs (zoning issues, cash-only operations, etc.) - are primed for rapid growth," Schau said.
And because of this rapid growth, we had to make sure our readers knew about the potential profit opportunity forming right now.
Here are the two cannabis real estate stocks on our radar in the booming $6.7 billion industry...