Understanding the difference between hemp and marijuana stocks

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Investors need to know what they’re getting into before handing over their money

Investing in stocks related to the cannabis industry has become a trend after seeing its great growth during the last few years. Many investors have set their sights on large companies related to this space, knowing that the probability of obtaining profits will be very high.

It is no secret that the massive legalization and decriminalization of the plant in the US has been a great boost for the industry, and as time goes by, more and more people want to have some kind of relationship with it. However, there is no need to confuse terms, as many consumers and even novice investors still have misconceptions about the cannabis plant and this is not ideal.

The biology and terminology used to distinguish the different varieties and strains are not only necessary for those looking for medicinal benefits, but also for investors who want to put their money into stocks. If you are thinking about investing in marijuana or hemp stocks, you should keep in mind that one of their major differences is the type of legality that surrounds them.

An investor should invest in what attracts him and interests him the most, and that is why a previous study is extremely necessary. Hemp was one of the first plants cultivated in the country thousands of years ago. In fact, it was considered one of the most important crops of mankind until the last century, especially because of its versatility and its wide range of applications in various industries, from textiles to cosmetics.

This is not the same as marijuana, which, although they come from the same species, there is a significant difference of which highlights the prevalence of the psychoactive compound tetrahydrocannabinol (THC). It was due to the scarcity of this compound in the hemp plant that was approved during the 2018 Farm Bill.

Thanks to the passage of this bill, hemp can now be used in a number of ways that marijuana cannot. With this in mind, it is vital to know what type of company you are dealing with because that is where it drastically changes the dynamics of your operations.