Cannabis as a market has continued to be fueled by a large amount of new and institutional investors coming into the space due to the massive amount of potential they see within the near future. This past week has been quite wild for prices in the market as new announcements continue to take precedence over the intrinsic value of some companies. Given that the market is still so new relative to other industries, it seems only likely that the market would still react speculatively to news, but as we move forward with the space, it seems as though this will begin to slow down.
Tilray (NASDAQ:TLRY) became the big news this week as its price surged as much as 90% before reversing those gains to trade down 18% on Thursday morning. Much of this was propagated by a piece of news that came out showing how the company would soon be able to import its cannabis into the U.S. for purposes of researching various ailments at the University of California San Diego. The sector as a whole has gone quite wild in the past couple of days given how speculative the market remains and the prestigious nature of the exchange at which it is being traded upon. Now, it’s clear that some of the valuations by investors may be overdone slightly, but what is certain is the amount of innovation and the future that these companies have put forward for the next couple of years and beyond.
Cannabis as a whole has been slated to be one of the most important markets of our time and has continued to show this massive amount of promise in lieu of many major setbacks with old legislation and the changing public perception of the substance. According to one report, the top 22 Canadian cannabis stocks have seem as much as 127% in gains in the past month or so, which is unparalleled by any other industry. These types of gains have made many investors notice the market that otherwise would not have. In addition, for some time, the market had been deemed too illegitimate for institutional investors to come into the space. With legislation changing around the world and currently in Canada, it seems as though many of the investors who may have been afraid in the beginning, have started to come into the market due to the massive amount of potential for the future. Christopher Growe, a cannabis analyst stated that “clearly, valuations require global opportunities to be realized, though we question the pace of development and degree of advantage for these companies.”
Although there may be some questions and answers in order to describe how advantageous the market has been, it seems as though most individuals are simply excited about the future of cannabis within Canada, the U.S. and in many countries around the world. As the industry continues to move forward with new legislation and the public opinion being recognized by those laws, it seems as though cannabis can continue to be the market of the future. Only time will tell how much more gains we can expect to see in the market, but for now, things are looking good.
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