Depending on who you ask, the American cannabis market could be worth billions. A recent estimate valued the market at nearly $30 billion if cannabis was legalized now.
Speculation has led to excitement for both industry insiders and investors wanting in on the action. Some cannabis companies are listed on the major stock exchanges. The prices for marijuana stocks have been expected to grow by astronomical amounts.
But how green is green? Here’s what the latest cannabis news says about weed’s stock market potential.
Optimism Continues to Grow
The latest marijuana news around legalization is fueling stock market optimism. Last year, the US’s next-door neighbor legalized cannabis across the country. Canada was the second country in the world to make recreational weed legal across the board.
While US federal legalization isn’t here yet, the legal situation is changing. Thirty-three states have legalized medical marijuana programs. Illinois became the 11th state to legalize recreational cannabis in June.
Other states have cannabis legalization on their agenda, but the road is often rocky. New York and New Jersey have both been wrestling with the issue in their legislatures.
What this points to is growing support from consumers of the cannabis movement. Many advocates have pushed for the decriminalization of possession. They claim penalties are harsh and represent a burden to the justice system.
Medical research has also recast marijuana in a new light. Rather than a dangerous drug, science suggests cannabis could help a host of health woes.
The result of this rising green wave is that the cannabis industry is growing. It’s backed by significant voter support in many places. This, in turn, is fueling stock market speculation. Demand is there, and companies will be growing to please consumers.
Signs of Federal Support
As we said, the legalization at the federal level isn’t on the horizon just yet. Still, there’s some suggestion that the feds may consider the issue soon.
The growing number of states legalizing is a sign that marijuana law needs to be reconsidered. Significant voter support is another. There are other signs as well.
One of those was the 2018 Farm Bill, which legalized hemp across the nation. Hemp plants are legally different from cannabis plants. By law, they contain less than 0.3 percent THC.
This led to hemp-derived products becoming legal across the country. This change in policy is fueling the CBD market’s growth. In light of that, pot stocks have continued to grow.
In a surprising move in July 2019, the Senate also held a hearing about cannabis. Specifically, the Senate was considering the SAFE Act. This law will allow banks to offer funds to cannabis companies in compliance with state law.
Some members of the government have also become vocal supporters of the industry.
Cannabis News From Stock Markets Less Rosy
Despite all this optimism, the stock market itself has shown some volatility. Many analysts have suggested weed stock might be overvalued, creating an investment bubble. A recent downturn could be evidence the bubble’s about to pop.
The latest stock market cannabis news says stocks dropped about nine percent in July. That continues a downward trend that started in April. Since then, MJ stocks devalued almost 30 percent.
The constantly changing legal atmosphere could be wearing on some investors. Others may be leery about reports of an upcoming bear market. The optimism could also be wearing off as many companies faced rocky fiscal years in 2018.
There have also been success stories, such as California’s Medical Marijuana Inc. The first-ever publicly traded cannabis company released its Q2 results. In it, the company announced its revenues had increased 30 percent year over year.
These results show the potential of the cannabis industry. It’s something that’s attracting more entrepreneurs. Learn more about how the entrepreneurial spirit is driving many cannabis companies forward.
More entrepreneurship is good news for investors. With plenty of small start-ups out there, investors could find themselves cashing in on the next big thing.
Is Now a Good Time to Invest?
Given that the mixed news about cannabis, investors still have questions. Is it the right time to invest in pot stocks?
There are two ways of looking at the issue. One is to take a look at dropping stock values and say the speculation has overinflated the market. In that case, you’d be better to wait for the cannabis bubble to pop.
Others feel that cannabis stocks have nowhere to go but up. That attitude is reflected in the continued optimism of many investors. When federal legalization happens, stocks will almost certainly soar.
With Washington making moves to consider cannabis, it seems like now is the time to invest in MJ stocks.
Look Beyond Producers
Much of the cannabis market speculation centers on the farmers actually growing cannabis. The cannabis industry is much larger. A good investment strategy will take that into account.
Consider the entire supply chain, from producers to distributors to individual dispensaries. Next, think beyond cannabis flower. Edibles, beverages, and even paraphernalia could make for solid investments.
The industry also needs land and technology, which makes real estate or stakes in biotech firms good choices. Even specialized software designed to serve the cannabis industry is cropping up. It may make sense to invest in the firms that are creating these products.
Another good way to diversify your cannabis investment portfolio is to look at exchange-traded funds. ETFs collect similar stocks together. This allows you to invest in many companies across the cannabis industry.
This diversification brings more security for investors.
Keep Your Eye on the Market
The market for cannabis is still evolving, as is the science behind it. Keeping your eye on the stock market will let you know when it’s the right time to invest.
If you’re looking for more cannabis news, we have you covered. Discover more about how cannabis is reshaping life in the 21st century. Keep browsing our site for more articles on how it’s helping us rethink health and wellness.