As more states in the US are legalizing recreational marijuana use, it makes sense to look at stocks involved in the cannabis industry. These stocks have seen an explosion of growth over the last few years, and many investors are wondering if this is just another bubble waiting to burst or if there will be much more upside for these companies.
Many of the stocks involved in the cannabis industry have more than doubled over the past year. Although there is a lot of volatility present, many people believe this growth will continue for some time to come. Since the marijuana industry is still in its infancy, some companies will benefit more than others.
Mergers and acquisitions
Some of the most significant gains in these stocks have come from mergers and acquisitions. Many companies are looking to get a foothold on the ground floor while it is still affordable, which means there will be many more opportunities for this activity in 2018.
Although there are indeed uncertainties involved with investing in the marijuana industry, it is essential to remember that when a new market opens up, many companies will benefit from it. The United States has been looking at decriminalizing this drug for quite some time. Only recently have they started legalizing recreational use on a state-by-state basis. As more states legalize this behavior, these stocks should continue moving towards pre-recession highs over the next few years.
Macro factors
Many companies are looking to get a foothold on the ground floor while it is still affordable, so there will be many more opportunities for this activity. Although there are indeed uncertainties involved with investing in the marijuana industry, it is essential to remember that when a new market opens up, many companies will benefit from it. The United States has been looking at decriminalizing this drug for quite some time. Only recently have they started legalizing recreational use on a state-by-state basis. As more states legalize this behavior, these stocks should continue moving towards pre-recession highs over the next few years.
Macro factors play an essential role as well. Many of these companies are multiplying that they will need access to capital to continue their rapid expansion, and this is where investors can make a considerable profit.
Increased Profitability
As the cannabis industry continues to grow, so do these stocks; because marijuana has been illegal for quite some time in many states, not that many companies have found a way to monetize it directly. However, as more of this drug becomes legalized, this will undoubtedly change.