There is no doubt that the cannabis market has been booming in recent times, but the past year or so has been instrumental in the development of the industry for the future. Some cannabis stocks have seen a growth of over 1,000%, leading many new investors to come into the space.
The research firm ArcView has stated that with a 33% increase in cannabis sales to almost $10 billion, the next 10 years could see that number going up to as much as $50 billion. This is a growth rate that is almost unprecedented in any other industry.
Polls throughout the U.S. have shown an overwhelming amount of support for the industry which has changed over the past ten years quite drastically. The current state of support for the legal cannabis industry is as much as 64%, which is almost double from where it was ten years ago. The market has also been changing dramatically throughout the world as Canada is currently in the process of legalizing cannabis recreationally by Summer of this year. The market in Canada could potentially become the first developed country in the world to have recreational marijuana legalized which is a huge step from any perspective.
Many have looked at the industry in recent times and seen quite a slouch of stock prices but there is a good explanation for this as well. Since the industry is largely driven on news at this point, many of the stocks react based on this speculation. With tumultuous news coming from left and right regarding legalization throughout different countries, many investors have been confused about what is going on in the market. This confusion is, however, beginning to subside as more and more people are becoming confident with the future of the industry. There are several reasons as to why the market has not been performing fully up to standards in the last month or so. These reasons include the aforementioned confusion as well as a series of halts from governments trying to legalize cannabis. The process behind legalization is quite complicated and thus takes time to fully work out before it can become a viable industry.
One of the largest industries within the marijuana market is that of the ancillary services being offered to the market itself. Companies such as Scotts Miracle-Gro (SMG) and the likes, are working to create the backbone of the industry, and are seeing large booms in their prices because of it. Since the current market on stocks that physically touch the plant is still in a confusing state, these ancillary stocks have been the safest option for those who don’t want full exposure to the market. This is not to say that full exposure is a bad thing but as any industry, it is more volatile than the second hand exposure to the market.
The fastest growing ancillary market to the cannabis industry continues to be that of packaging. Companies like Kush Bottles (NASDAQOTH: KSHB), have been changing the way cannabis is packaged. With a new slew of regulations coming from governments allowing legal cannabis, packaging is one of the more highly regulated items as well. Because of this, Kush Bottles and other similar companies have been a true necessity to the future of the market as we know it.
The world of cannabis has remained extremely positive for those who have gotten in and those looking to get in. In any market, there will always be ups and downs, but the next several years are poised to potentially be some of the largest that we have seen in cannabis thus far.
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