Right now we’re in an exciting time for investors who are interested in the cannabis industry. Business is booming, new opportunities are emerging every day, and smart investors who are getting in now are positioning themselves for massive long-term rewards.
This being the case, many investors are considering their options and trying to find the best way to get in on the action. Depending on your goals, the smart bet might be to get involved with a Canadian cannabis limited partnership, or “LP”.
What Is an LP?
In case you’re not familiar, an LP is different from a general partnership in that investors do not get involved with the day to day operation of the company. As the name would suggest, their involvement is relatively limited.
There are several reasons why you would benefit from an LP in the long run:
Perhaps the largest benefit involves effort and time commitment. With an LP, you don’t have to get involved with the general operation of the business. This is a big advantage when you consider the complexities of the rapidly changing cannabis industry.
For example, when you join in an LP with a company like Invictus MD (OTC: IVITF) (TSXV: IMH), you can allow their experts in the intricacies of cannabis legality, cultivation, and distribution handle the actual operation of the company, while you get to sit back and watch the industry grow and the money roll in.
There are a variety of potential tax benefits to an LP investment. For example, limited partners don’t have to participate in running the company, yet they share in its profits and losses advantages. So take in more, write off more, and get taxed less.
In a general partnership, you’re all-in, and any property or money contributed becomes an asset to the whole company. With an LP, on the other hand, your liability for the partnership’s debt is limited to what you put in. So an LP keeps you better protected in the unfortunate event that the business doesn’t work out.
Ease of turnover
With a general partnership, the exit of a partner can be a huge headache to everyone who remains. But limited partners can leave without too much fuss. This is a huge benefit if you’re looking for long-term gains. Other partners will come and go, but you’ll be positioned to ride it out come what may.
Bottom line – a Canadian cannabis LP is an outstanding opportunity for any investor looking for long-term returns. It allows you to get involved with the cannabis business without having to be too involved, and it provides an array of tax and business benefits.
Essentially, a limited partner allows you to engage in a rewarding investment without dealing with a lot of the operational, legal, and tax implications that go into more complex business arrangements. An LP even involves less paperwork than a general partnership or the formation of a corporation.
All of that translates into more returns for less effort as the years go by.
Disclaimer: Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Civilized is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. Civilized may be compensated for its services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two.