The analysts of the ETF company AdvisorShares reported that they see the cannabis industry as positive overall. This is a very important signal. Especially at a time when the stock market prices of the industry’s big names are plummeting. According to the ETF, cannabis stocks are currently over-sold. Further news also makes it clear that things could soon go up again.
Cannabis shares potential spurred by Canadian politics
The rise of CBD is just one example of why cannabis leadership is so important – and why it’s so hard for investors to pick winners. Cannabis is a dynamic industry – the landscape seems to change daily. For instance, six months ago, hemp was a controlled substance on the federal level. Today, it’s a fully legal, mainstream agricultural product.
Since last week it has been legal in Canada to sell food and certain products containing cannabis additives. Some, therefore, refer to the cannabis market as 2.0. Much of the turnover could possibly result from food. In addition, cannabis drinks and health products play a major role.
On the whole, many experts rate the opportunity/risk ratio as significantly more attractive due to the cannabis news. The analysis of AdvisorShares comes to one conclusion. The legislative change and further liberalization in Canada could drive the market up and stock prices up.
A further milestone was the adoption of the SAFE Banking Act in the United States of America. In the future, financial institutions doing business with cannabis companies will benefit from protection from prosecution.
Cannabis Stock Forecast – Quo Vadis?
The ETF Society believes that opportunities in the cannabis sector are great. In addition – as mentioned – the purchase prices are currently phenomenally favorable, as an undervaluation according to the ETF certifies. On the other hand, this does not mean that volatilities are not expected.
Cannabis is still not legal in the whole USA. It has a virtual program. The online stock portfolio has fields with cannabis securities will be subject to greater fluctuations. In the best case for the better with full returns!
Insight into the cannabis sector 2019
Since our first analysis in autumn 2017, marijuana stocks for 2018 have all performed outstandingly. At their peak, Aphria’s shares rose by up to +180%, Aurora Cannabis by +200% and Canopy Growth by as much as +330%.
In September 2018, we advised you to take profits on all shares, as the risks increased steadily with steeply rising prices. That was absolutely right because all stocks in the industry had a sharp correction and lost -50% or more in value.
High price gains for cannabis stocks in 2018
Hardly any of the cannabis stocks have recovered significantly so far. After the initial hype, the wheat is now separating from the chaff. Only the most sustainable business models will prevail.
This makes the sector interesting again for investors and brings back memories of the Neuer Markt and the Internet bubble. Only the most viable and largest companies were able to survive. While most small companies disappeared from the scene again.
The “survivors” of the Internet hypes such as Amazon or eBay were able to make immense gains in the following years. This scenario could also be exemplary for the cannabis industry, even though – despite all the euphoria – it is considerably smaller.
(Featured image by Esteban Lopez)
First published in kryptoszene, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. B2I assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. B2I is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
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