A majority of Americans now favor legalizing marijuana, with 29 states already legalizing medicinal marijuana, making cannabis one of the most exciting new industries to invest in.
That's why today we'll show you our three best marijuana penny stocks to buy in 2018.
Now, marijuana is still illegal at the federal level, which makes investing in cannabis stocks riskier than other industries.
But make no mistake: Despite U.S. Attorney General Jeff Sessions' attempts to re-criminalize marijuana users and businesses, the marijuana market continues growing as legalization spreads to more states.
As of Jan. 1, 2018, the state with the largest population, California, officially legalized recreational marijuana across the state. Other states like Massachusetts, Maine, and Nevada have also recently legalized cannabis. They join states like Colorado, which legalized recreational pot back in 2012.
Currently, 29 states have at least decriminalized or legalized marijuana in some form, and that number is likely to increase over the coming months.
Still, until federal laws change, larger and more established companies will not be willing to enter the legal marijuana market.
That's because these bigger firms trade on major exchanges regulated by the U.S. Securities and Exchange Commission (SEC). They also keep their money in banks regulated by the Federal Deposit Insurance Corp. (FDIC).
These are both federal agencies that can prosecute federal crimes even if they're legal under state law. Specifically, the SEC can delist stocks, and the FDIC can freeze assets.
That leaves the field wide open to small, innovative companies. They often trade on over-the-counter exchanges, which have lower requirements to be listed than major exchanges like the New York Stock Exchange (NYSE) or Nasdaq.
As a result, small marijuana startups can take risks and grow quickly, since they're operating virtually free of competition from larger and more capitalized companies.
For example, one of the largest marijuana-infused edible companies in California started out as four workers experimenting in a kitchen. Today, the company's workforce has grown to 80 employees in a 30,000-square-foot production facility.
Companies like this have first-mover advantage in a sector expected to expand rapidly.
According to BDS Analytics, revenue from legal pot in California alone will hit $577 million this year.
And that's just the beginning. ICF International predicts that revenue from combined legal marijuana sales – solely in California – will eventually hit $20 billion annually.
Pot Stock Profits: A historic event is unfolding in California's marijuana markets, and the wealth expected to flow into this industry is record-breaking. Learn how to cash in here…
That would ultimately represent an increase of 3,366% for the California marijuana industry.
To get in on the first-mover advantage, here's the first of our top three marijuana penny stocks to buy in 2018…