BUZ INVESTORS Marijuana Stocks Today The state of the marijuana industry is in constant flux. Being as it’s so reliant on governments passing laws regarding usage of medicinal and recreational weed, the news has a prominent effect on weed stocks, compared to stocks in other industries.
After all, very few companies worry on a daily basis whether the government will step in and seize their products. With those concerns in mind, alongside the rapidly growing stock prices, many have begun to ask if there is a marijuana stock bubble.
We want to avoid that situation at all costs. Bubbles are one of the most dangerous events to occur on markets for investors. Just think back to the Great Recession caused by the housing bubble, or the crash in the 2000s precipitated by the dotcom rush.
The questions surrounding marijuana legalization have pushed many to wonder about the possibility of a marijuana stock bubble. And for good reason
“Marijuana is against federal law, and that applies in states where they may have repealed their own anti-marijuana laws. So yes, we will enforce law in an appropriate way nationwide,” said Sessions in an interview with conservative radio talk show host Hugh Hewitt.(Source: “Trump and his attorney general are freaking out the $7 billion pot industry,” CNBC, March 14, 2017.)
“It’s not possible for the federal government, of course, to take over everything the local police used to do in a state that’s legalized it. And I’m not in favor of legalization of marijuana. I think it’s a more dangerous drug than a lot of people realize.” (Source: Ibid.)
A mass crackdown in the U.S. by federal agents in states where the drug is legalized would crush pot sales and stocks. One swift action would create—then burst—a marijuana stock bubble.
In fact, a large portion of marijuana bubble concerns revolved around the shaky legal ground that the product stands on, especially in the United States.
In fact, it is exactly those types of rapid gains that led to many to question whether there is a marijuana stock bubble.
Take Aurora Cannabis Inc (CVE:ACB) as an example. The company is now up over a mind-blowing 4800% in the past 12 months. Talk about a hot investment and a huge gain for the marijuana penny stock.
Canopy Growth Corp (TSE:WEED, CVE:CGC) not only has a great ticker name, but also is one of the larger and more stable marijuana companies around.
Up five percent since the beginning of the year and 200% over the past 12 months, there has been good reason to go in on one of the stronger marijuana stocks available
There are options out there for investors hellbent on jumping into the weed market, but the question for most investors who are not maniacally interested in pot stocks comes back to whether there is a marijuana bubble.
The answer to that question is by no means definitive, and relies on marijuana legalization and other factors that could cause massive tremors throughout the industry. A faltering of Canadian legalization, for instance, could thrash marijuana stocks.
And while it’s still too early to judge if a bubble is indeed looming on the horizon for the weed industry, I would put my money on a marijuana stock bubble occurring at some point, versus never taking hold.
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