Why Cannabis REITs Could Get a Whole Lot Riskier
A real estate investment trust (REIT) can sometimes offer a safer way to put your money to work in an industry. Rather than directly investing in a company that produces goods, with a REIT, the business you invest in can do well as long as it continues to collect rent from its tenants.
Many marijuana producers are not profitable, which is why REITs serving the industry can be risky. And there's a new development that could make these types of investments even riskier than they already are.
A big problem with the cannabis industry today is that marijuana remains illegal at the federal level. Although dozens of states across the country permit either medical or recreational use of marijuana, without federal legalization, it still operates as an illicit industry.
Source Fool.com
