The cannabis market has managed to stay incredibly lucrative for some time now, but many investors have gotten in as of recent due to the impending sales of recreational cannabis throughout Canada beginning on October 17th. This date has continued to be seen by investors as the holy grail for the market as so much of the industry is based out of Canada. With this legalization only weeks away, the market has seen somewhat of a slow down in anticipation of such a large event, but all of this seems to be returning to usual as we move throughout the near future.
One report states that in regard to the slowing down of the cannabis space in recent days, “Pot stocks are hot in winter, cold in summer. That’s a weird seasonal pattern that doesn’t appear to make any sense, but the charts speak for themselves. Last summer, I shed light on this seasonal pattern and recommended investors be greedy while others were fearful after marijuana stocks shed around half of their value.” As odd as this may sound, the science behind the stock market is extremely based in social patterns, so something as simple as the season can change how investors spend their money in the market.
Many investors who made their early returns in the cannabis space have moved on to other early growth markets, but those who have been smart, have been waiting for the news that is coming in the near future. The cannabis market seems to still have a long way to grow before it can reach the maturity of other markets, but everything seems to be going in the right direction. Marijuana stocks such as Aurora Cannabis (TSX: ACB) or Aphria Inc. (TSX:APH), among the other big players in the industry, have been trading in sync with one another due to the fact that many stocks have been working off of speculation given the newness of the industry. This seems to be changing very rapidly as investors are beginning to invest off of the true value of the company rather than what the news says.
One investor stated recently that “Marijuana stocks may be relatively calm for now, but that’s not going to be the case come the latter part of the year. The stakes (and trading volumes) are about to be raised.” As many countries around the world gear up for the new legislation to take place, it will continue to be interesting to see where stocks go in the near future.
Although it seems like Canada is the only place in the world where cannabis investing happens, many other countries such as the U.S. and Germany, have extremely large and growing cannabis markets as well. The only issue that currently stands is that of legislation. It seems as though this is changing very quickly though given how frantic much of the public is to see cannabis be legalized for recreational use in various countries. The cannabis industry as many forget is still very much in its infant stages which means that there is a lot of time and room to grow as we move across the course of the next few years. Only time will tell how stocks continue to react to new legislation being put in place as well as the changing public sentiment on cannabis as a whole. The future, however, does look to remain extremely bright as all of the issues with the market begin to subside, and investors once again feel comfortable investing in a market with such a large amount of potential.
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