The Changing Tides of the Cannabis Industry Present New Investor Opportunities
Marijuana stocks have remained widely popular amongst both institutional and retail investors. With companies like Cresco Labs Inc. (CRLBF Stock Report), Innovative Industrial Properties Inc. (IIPR Stock Report), and Valens Corp. (VLNCF Stock Report) leading the charge, it seems as though anything is possible. In addition, U.S. alternative marijuana stocks like Scotts Miracle-Gro Inc. (SMG Stock Report) and GrowGeneration Corp. (GRWG Stock Report), have also helped to push industry growth. From a larger perspective, investors and analysts have continued to start that the cannabis industry has a lot of growing to do in the future.
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In 2019, the cannabis industry finished the year with a value of more than $13.6 billion. At the end of the same year, more than 340,000 jobs were reported in the cannabis industry. In the U.S., there are 33 states that have legal cannabis with more potentially on the way. These states all have either medical or recreational legislation or both. And with cannabis continuing to be the most popular illicit drug in the world, marijuana stocks and the cannabis industry have a lot of growth left to occur. But, in order to see as much growth as possible, there are some dominos that need to fall. With that in mind, let’s take a look at the factors that could help marijuana stocks grow in the future.
The Changing Sentiment of Marijuana and Marijuana Stocks
Around the world, the attitude and sentiment of the public toward cannabis has changed dramatically. After decades of propaganda scaring the public out of using cannabis, the substance has become more popular than ever. With Covid, many states decided to make cannabis an essential business during the pandemic. Not only has this helped the cannabis industry and pot stocks grow, but it has also helped to illustrate just how important marijuana is to the public. According to a research survey done by Pew, almost 70% of Americans believe that cannabis should become legal.
For some context, in 2000, only 31% stated that same thing and in 1969, that number was only at 12%. Obviously, a lot has changed since the 60s, but the attitude toward cannabis is undoubtedly different. Because of this, more legislative shifts are going into place, and more laws are being put on the ballot. An analysis done by Cowen, stated that by the year 2030, the cannabis industry could produce more than $85 billion in sales. This is quite a substantial jump from where we are now. But, given the trajectory of the current cannabis industry, it doesn’t seem to be too far off.
Politics Continue to Shift Marijuana Stocks in the Right Direction
As 2020 comes and goes, we are continuing to see positive sentiment surrounding the cannabis industry. As stated before, this sentiment could lead to new and better laws backing marijuana stocks and the cannabis industry at large. On November 3rd, 5 states are set to vote on whether or not to legalize marijuana. These states could help to add to the growth estimates for the cannabis industry. In addition, there is no way that the federal government in the U.S. can deny the importance of the cannabis industry.
Aside from tax revenue to states, cannabis businesses have raised and contributed a large amount of money to the economy. According to Viridian Capital Advisors, in 2019, cannabis companies raised almost $120 billion in capital. The same group states that this year, that number could be much greater. In addition, there are several new laws that could help the chips to fall where they may. This includes the SAFE Banking Act which could revolutionize the way that U.S. marijuana stocks and cannabis businesses function. With all of this in mind, the hopes are that legislation can change for the better in the future.
Marijuana Stocks Continue to Have a Large Influence on the Market
In 2020, the amount of those invested in marijuana stocks has grown substantially. With the advent of retail investor tools like Robinhood, more investors than ever have taken to the cannabis industry. In addition, the influence of big marijuana has become more than ever before. With the massive growth numbers stated before, many investors believe that the cannabis industry could stay a winner throughout the future. But, a lot of this will depend on what happens in the next six months.
For now, all we can do as investors is continue to watch the cannabis industry to see what changes go into effect. With that in mind, investors should also continue to research each marijuana stock to see what the company has planned for the long term. While the future is definitely uncertain, the hopes are that we can continue to see marijuana stock and cannabis industry growth.
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