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Cannabis stocks follow the general trends in the markets

The corona crisis has affected all markets, with the cannabis sector not being an exception. However, last week, a slight increase in the price of some cannabis stocks was registered. It’s hard to predict how the dreaded second wave, which may already be over, will affect the cannabis industry. Investors in cannabis companies should take in consideration all factors, before buying stocks.



This picture show a compass and some market data.

It is an exaggeration to say that cannabis stocks have simply risen in the last week for no obvious reasons, but overall the cannabis sector has primarily joined the momentum of the overall market.

It is well known that the US indices, especially the S&P 500, are at high levels, and those who believe the recent massive slump is just a correction have bought cannabis stocks. However, there are more and more comments from experts who expect complete legalization in the USA by 2022, and there are strong arguments for this.

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The current developments in the cannabis market

Israel is taking a decisive step towards the legalization of cannabis in the Holy Land through a bill in the Knesset. The country has a long history in cannabis research, especially as a medical therapy leader, and there are some cannabis shares from Israel that are worth being considered. 

The sales figures of cannabis remain impressive, especially overseas. Although the coronavirus continues to rage and politicians are trembling, especially in Bavaria, many people and especially companies have realized that things have to go on – production starts up, people travel again and cannabis continues to be sold in really big quantities. Without a doubt, there is a normalization in Canada and the USA.

It’s hard to predict how the dreaded second wave, which may already be over, will affect the cannabis industry. Once cannabis was deemed essential, it is now considered part of the basic supply and the arbitrary closing of specialty stores like in March is unlikely to happen again. Even in Europe, as new data showed, the consumption, sale, and cultivation of cannabis is increasing by leaps and bounds and it is strange how policy makers think they can ignore these developments. If politicians with verve and spirit can finally be found in the EU and the USA, then cannabis legalization can happen quickly. The smallest indications of such changes will give cannabis shares a lot of power.

Marijuana index and performance of cannabis stocks

A nice, but not spectacular growth brought a rise in cannabis securities last week, accounting on average, for a few percentage points on the price. However, fluctuations can also be seen and especially a lot of technical movements within solidifying chart lines. Stocks from the US are roughly in better shape than those from Canada, where the specter of overproduction is always unsettling some investors.

Selected cannabis stocks at a glance

From $15.8 (€14) to $18 (€16) and then down a few cents, Canopy Growth offered a particularly good picture on the market. This was combined with positive comments from the board of directors on a possible cannabis legalization in the U.S. in 2022. In addition, investors liked the company’s investment in the field of cannabis-infused drinks, which are sold over the counter in countries such as the U.S. and Canada.

The company Aphria, which many investors love, always rises quickly when the market as a whole is doing well and then only shrinks slowly when there is a correction. It is quite possible that there is a lot of money in this cannabis company, i.e. capital that is not immediately withdrawn with every loss. 

Deutsche Cannabis AG went down to 50 cents, which only happened thanks to the figures published last week. However, no news about the company were released for days and the stock is still an extremely risky investment for speculative oriented investors.

Outlook for for the next week

The corona crisis and Trump will move the markets, because on the one hand the aforementioned second wave is feared and, on the other, the US president is starting his election campaign, which may lead to new unrest and violence on the streets of America. 

Investors in cannabis shares always look at current world politics. However,  they should also check the infection rates daily and do not forget the economic data, such as industrial production or retail sales, which allow them to draw conclusions about cannabis-focused companies.


(Featured image by AbsolutVision via Pixabay)

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Suzanne Mitchell juggles the busy life of a full-time mom and entrepreneur while also being a writer-at-large for several business publications. Her work mostly covers the financial sector, including traditional and alternative investing. She shares reports and analyses on the real estate, fintech and cryptocurrency markets. She also likes to write about the health and biotech industry, in particular its intersection with clean water and cannabis. It is one of her goals to always share things of interest to women who want to make their mark in the world.