Kratom Stocks: Can You Invest In Kratom?
Most Kratom enthusiasts have been asking this question on various online platforms. Unfortunately, most do not get a detailed answer. The answer to the question is NO! Currently, Kratom companies cannot take part in the stock exchange for public trading. That means there are no stocks for interested parties to buy in the market. For those still willing to invest in Kratom may have to wait for some time.
However, it is essential to learn why the product is not on the public stock exchange. In this article, we have detailed what it means for a company to go public, about IPOs, and reasons not to take your company public.
Why Kratom Companies cannot take part in Public Trading
Before explaining more about Kratom stocks, it is essential to check what it means for a company to go public. This is in reference to (SEC) Securities and Exchange Commission.
Taking a company public means the business undertakes its (IPO) initial public offering, by selling shares to the public to raise more capital. After its initial public offering, the business owner should subject the company to public reporting requirements, listing its shares on the stock exchange.
Subjecting a company to public trading means you should make the business privacy easily available to the public. When a company goes public on the stock exchange, it must:
- Report to the SEC annually: The report, which should be available to shareholders and the public, contains details about exchanges, finances, securities, among many more.
- Inform shareholders about company finances and directives. Shareholders have the right to say in the public company’s direction moving forward. The company respects shareholders’ directives even if they do not share similar goals.
- Practice the rules of stringent and complex accounting, which differ from those of private accounting. The complex accounting rules require companies to have an experienced accountant, which is an addition to their overhead cost.
The companies should subject themselves to third party auditing.
As mentioned earlier, the privacy of a company on stock exchange should be easily available to the public. However, companies do not offer Kratom stocks due to SEC reporting and public scrutiny.
Reasons Kratom stocks are not available in public trading
As we all know, Kratom is a product from Mitragyna speciose tree in Southeast Asia. The plant has a storied history. The locals of Southeast Asia have been using the plant as a traditional medicine for thousands of years. It found its way in the U.S market in the last decade. Therefore, U.S government bodies such as FDA and the DEA have not come up with a clear report on how to treat kratom compounds.
For those who are not aware, publicly traded companies have a value based on their stock value. If the company receives bad press or gets involved in a controversy, the value of their stock drops significantly.
Kratom is legal to possess or consume in most states and cities across the United States such as Arizona, Alaska, California, Colorado, Georgia, among many others. Places such as San Diego banned the product over the years. However, Kratom is illegal in various countries across the world, including Canada, Russia, Finland, United Kingdom, Korea and Switzerland. Thailand was among the first country in the world to ban the planting, possession, and consumption of Kratom.
Kratom stocks cannot be available while the product’s legality is still volatile. It would lead to unstable stock prices. In addition, kratom companies providing shares will be under increased scrutiny by the FDA, SEC, and DEA.
In addition, because of the gray area that the product occupies, vendors cannot provide kratom in public shops. To get quality kratom, one can only buy the product online.
This precarious business increases the risk prospect for public kratom trading firms. For a company to be listed on the stock exchange, it has to disclose its wealth of information. The scientific evidence that supports the effects of the product is inconclusive posing a problem to companies that want to provide kratom stocks.
Most kratom companies do not display their products on the market due to lack of information. In addition, the status of kratom as a prohibited substance has discouraged manufacturer in some countries from being listed.
What would happen if companies sold Kratom Stock?
Offering Kratom stock to the public would be severe due to the criminal codification of the product. Also, since the product is a controlled substance in some states in the U.S and illegal in others, it is against the law for kratom companies as well as shareholders to sell the shares publicly.
If Kratom companies provided shares to the public, and the government discovered those responsible, they would face the law for the crime or risk imprisonment. Given the lucrative nature of Kratom, it is unfortunate that Kratom stocks cannot be available to the public.
There are over five million-kratom users worldwide and sales the product’s sales continue to rise with around $1billion across the world.
Will Kratom companies ever exist?
Only time will tell! Kratom enthusiasts are optimistic about the future of Kratom stocks. However, before kratom stocks can begin trading publicly, there is a lot that needs to be done. The first step is the implementation of comprehensive Kratom regulations by the FDA, DEA, among other U.S government agencies. The regulations would:
- Regulate the market of Kratom like other supplements, do away with kratom swindles in the market, and improve the quality of the product.
- Implement necessary third-party lab testing for Kratom on the market currently. This would help extract untrustworthy vendors of the product from the market.
- Offer protection for both manufacturers and consumers of kratom like those provided to cannabis companies.
- Allow kratom vendors and manufacturers to access banking. That would help in market expansion and make the market safe.
Before it enacted the kratom regulations, it is difficult to predict kratom stocks getting into the public stock exchange. However, there is no need for kratom enthusiasts to worry since the future of kratom’s legality is still promising meaning once the FDA and DEA gain trust on the product, Kratom stocks will be available on the stock exchange. One day, Kratom enthusiasts and other investors will invest in Kratom stocks. However, for now, we should be patient.