Excited investors are rewarding new companies in the legal marijuana industry with large market capitalizations, according to Professor Aswath Damodaran (New York University Stern School of Business) in a blog posting. The cannabis market will be a “big one,” he says, with conservative forecasters predicting that global revenues from marijuana sales will increase to $70 billion in 2024, triple the sales today. In terms of investing, he sees potential in indirect players in the market, such as Scott’s Miracle-Gro and GW Pharmaceuticals (producing cannabis-based drugs for epilepsy and multiple sclerosis). The professor adds this caveat to his posting: “I have never smoked marijuana, but, on my daily walks on the boardwalks of San Diego, I have been inhaling a lot of second-hand smoke, leaving me a little lightheaded as I write this post. So read on at your own risk!”

Extra: BVR offers several resources for business appraisers who are valuing firms in the cannabis industry, including The State of Legal Marijuana Markets and The Cannabis Industry Appraisal and Accounting Guide.