“Cannabis is still illegal on the federal level, so it makes investing very risky,” said Jessica Rabe, a research analyst with ConvergEx, a New York-based brokerage that released its outlook for the industry last week. Federal laws make it difficult for marijuana businesses to open bank accounts, and as a result many have gobs of cash sitting around, making them targets of robberies.
“The recreational marijuana business shows a vibrant and growing industry as more states legalize the drug,” ConvergEx said. However, it said several states with legalized recreational use have put barriers to out-of-state investors, and “the U.S. Department of Justice frowns upon outside money flowing into the marijuana industry as well.”
Overall, state-regulated marijuana sales reached $5.7 billion in 2015, up nearly 24 percent from the prior year — boosted by growth tripling in the recreational market, according to “The State of Legal Marijuana