The marijuana industry has been one of the most important markets of the modern day, showing how legalization can affect the future of a space. Although many have made profits in the market, many investors wonder as to whether or not cannabis should be considered a growth market at this point in time.
In less than ten years or so, studies have shown that the whole of the cannabis industry could be worth almost $150 billion in total. This may seem extreme, but with a large number of countries and states within the U.S. working as quickly as they can to legalize cannabis, it seems entirely possible. Investors, however, have been the real propagator behind the market as they have worked to give it an influx of much-needed capital to help sustain future growth. One of the biggest pieces of news in the market came as Canada decided to legalize marijuana on a nationwide basis. This was the first time that a first world country decided to legalize the use of cannabis and represented a complete paradigm shift in the industry for investors and those who participate in the market. Although revenue seems to be up for most of the companies in the space, it seems as though some of the stock prices have not reflected this positivity.
One of the main reasons for this comes from the fact that there is a massive amount of growth in the marijuana industry going on at this current time. This doesn’t allow for a large amount of capital accumulation, and rather puts all the free capital of companies into growth opportunities. Recent times have shown that companies such as Tilray, have seen growth amounts above 85% which is quite substantial considering the exchanges these companies trade on.
Some reports have shown that costs are growing faster than revenue, but this issue seems to easily definable when looking at the growth mentioned above. Although there are losses in the market to some extent, more and more investors have continued to pour in showing the amount of promise that they believe lies within the cannabis industry. One of the main reasons for this comes from the fact that the majority of these cannabis companies have a large amount of intrinsic value. Unlike some other industries, cannabis companies are producing a product with a well-defined demand and an even more defined cost. As companies are able to increase the amount of production they can get per run, it seems as though demand is also rising. This combination along with the new laws going into place around the world means that there is no shortage of demand in the cannabis space. All in all, cannabis seems as though as an industry investor may still be early. The market still has a large amount of room to develop throughout the future which means that this is only the beginning. The marijuana market, however, is extremely prevalent in today’s world and continues to show its face throughout promise for growth in the coming months to years.
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