Tuesday, January 31, 2023

Is Legal Cannabis The New Bitcoin?

Investors who have missed the boat on opportunities that have made others stinking rich in the past do not want to miss catching the first wave of legal marijuana. With Canada on the verge of launching its fully legal marijuana market in October, cannabis stocks in the northern nation have made tremendous gains. So much, in fact, financial experts are calling cannabis the next bitcoin, according to Newsweek.

“I believe the incredible tailwinds blowing at legal marijuana’s back make it so the opportunity here is much like the one internet stocks offered in 1994 … or the one bitcoin offered in 2015,” wrote Matt McCall, founder and president of Penn Financial Group, in his multi-part series on cashing in on the cannabis explosion. “If you missed the opportunity to make 50 times your money in internet stocks … or if you missed out on the opportunity to make 50 times your money in bitcoin, you’re going to want to know how to play weed.”

Last year, following the promise of Prime Minister Justin Trudeau to legalize marijuana nationwide, Canada’s cannabis stocks experienced substantial growth, becoming the best performing stock in the country. Those investors that got in on the ground floor of leading publicly traded companies, like Canopy Growth and Aurora Cannabis, “easily reaped Bitcoin-like returns,” according to a report from Global News.

Some of the latest data shows that “smokeable marijuana” will generate in upwards of around $5 billion in Canada once the industry is off its leash. But that market will swell to the vicinity of $22 billion once the edibles sector is allowed to join in the fun later in 2019. Canopy, which is presently working with brewing giant Constellation Brands to create a line of THC-infused beverages “for the world market, including the U.S,” is worth an estimated $6.7 billion. Analysts predict its value will increase on the heels of Canada’s national marijuana trade.

But this doesn’t mean that investors should just start throwing money at just any old weed stock. A large majority of them will fail, says Allan Gregory, a professor of economics at Queen’s University. “Every marijuana stock is going to fall … the losers will outweigh the winners,” he said.

Still, there could be some snags because marijuana remains illegal at the federal level in the United States. The situation has already caused some problems in Uruguay, the first nation to go fully legal, with U.S. banks refusing to do business with its financial institutions connected to legal weed. The same could happen with respect to Canada. Although it is possible the reaction will be different this time around.



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