have far superior financials than their Canadian counterparts and are more attractive buys.Until recently, you might only have heard of the video conferencing tool Zoom if you worked in the tech industry.īut since the spread of the coronavirus caused so much of the world to adopt work from home policies, Zoom has become almost synonymous with its function. However, I still wouldn't suggest investing in a struggling stock like Aurora Cannabis - multi-state operators in the U.S.
If you're comfortable with taking on significant risk and are OK with waiting many years for legalization, then buying cannabis stocks today could eventually prove to be profitable. That could result in you incurring even larger losses along the way.īy waiting to see what the industry looks like, investors can make better, safer decisions as to how to invest in cannabis stocks. And even if they don't end up going out of business, the landscape could change, new businesses might enter the industry, and companies may not be as dominant as they appear to be today. The danger for investors is that while waiting for legalization in the U.S., some businesses might simply not be around for it. Meanwhile, in Australia, a political party, the Greens, is also working on a campaign to legalize marijuana.Įven for U.S.-based cannabis businesses that post adjusted EBITDA profits, they still aren't truly profitable as net losses are the norm for the industry: Internationally, Germany might become the largest country to allow cannabis since it is also considering legalization as early as next year. New Jersey and New York are among the most recent states to pass legislation permitting adult-use pot. anytime soon, that doesn't mean more states won't open up for business. While investors shouldn't get their hopes up for federal legalization in the U.S. There will be significant opportunities for businesses to expand and grow their market share in the U.S. Analysts from Allied Market Research expect that globally, the cannabis market will grow at a compound annual rate of more than 20% until 2031, when it will be worth nearly $149 billion. The case for investing in cannabis stocks today centers around the industry's long-term growth potential. So it boils down to an all-important question: Should you buy cannabis stocks today, or are you better off waiting? Why you might not want to wait But even though more people are using pot than in the past, that still doesn't mean legalization is around the corner. One catalyst that could turn things around is the legalization of marijuana in the U.S.
Buying on the dip is a tricky prospect for cannabis investors because pot stocks have continually gone in one direction: down. 26, the Horizons Marijuana Life Sciences ETF's price is down 61% over the trailing 12 months, versus the S&P 500's more modest decline of 18%. As bad as the stock market has been doing of late, cannabis stocks have been even much worse buys.
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