A Crash Course for Investors on the Lingo of (Legal) Weed

With Canada set to legalize recreational use of marijuana on Oct. 17, the world appears on the cusp of a cannabis boom. Spending on recreational pot will surge to $32 billion globally by 2022, triple its current size, U.S. research firms Arcview Market Research and BDS Analytics say. At least three Canadian pot companies have stock market values of more than $10 billion each, and new companies are popping up by the day. Investors looking to break into the marijuana market may need to hit the books first. Just don’t call it “high” school.

There are two key chemical compounds found in marijuana, aka weed, dope, Mary Jane or countless other nicknames. Only THC (tetrahydrocannabinol) gets you high, while CBD (cannabidiol) is increasingly being used to treat medical conditions such as sleeplessness and anxiety . These chemicals, collectively known as cannabinoids, are most potent in the cola — the flowers or buds at the top of plant. There are three main types of plant. Indica, stout and bushy, is purported to produce a mellow high. The taller sativa is said to give a more energetic lift. A hybrid may have features of each. The essential oils that give a plant flavor like citrus or clove are terpenes. Pot’s poor cousin, hemp, doesn’t get you high but does contain CBD and has long been used to make clothing and rope and for other industrial purposes; it’s even sprinkled on cereal in the form of seeds.