The Risks of Cannabis Investing

Colby McCoy
Written by Colby McCoy

Just recently I wrote a short piece covering the risks associated with CBD products and employee drug testing. As it turns out—CBD-based products, which are now federally legal under the 2018 Farm Bill, have put many employees at risk when it comes to drug testing.

But what about investing in cannabis stocks? Is investing in cannabis purely on the up and up or do investors have to occupy a grey area, legally speaking? It turns out that it’s a little bit of both.

According to a recent MarketWatch article, federal government employees are particularly at risk when it comes to investing in the stock market. Due to the fact that cannabis is still classified as an illegal substance, any investment related to the cannabis industry is technically illegal.

One such case occurred when a federal government employee was asked to sell their shares in cannabis stocks before being granted their security clearance. This exact case has many parallels with federal employees being terminated due to THC showing in drug tests. Even if the products the individual used were CBD-based and do not contain THC, any traces of THC in one’s bloodstream leads to instant failure of the drug test.

The continued federal prohibition on cannabis has forced many cannabis companies to go public on the Canadian exchange to avoid running afoul of the feds. While publicly traded cannabis firms in the U.S. do exist, many firms in the cannabis space have opted to go the Canadian exchange route.

That being said public interest in cannabis stocks has increased in recent years along with booming sales in CBD products. Generally speaking, non-federal government employees shouldn’t be too worried about investing in cannabis stocks. However, if you are a federal employee it is best to proceed with caution and consult with the proper legal experts.


Image Credit: Market Watch

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Colby McCoy

Colby McCoy

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