The past few months in the cannabis industry have been less than stellar, to say the least. During that time, we have seen the top pot stocks lose as much as 40% in value. This is obviously not a great thing for investors to hear, but there may be a light at the end of the tunnel. After all, every big stock market crash is usually followed by a major market boom. The losses that we have sustained in the cannabis market cannot all be blamed on the coronavirus. The industry has had several issues that it has been fighting for quite sometime now.
Those issues include everything from supply shortages all the way to the rise of the black market. Because of this, we have seen losses not just in the past three weeks, but in the past twelve months overall. But, the coronavirus has helped to bring these issues to light. Moving forward, we may see cannabis companies begin to shift their business models for the better. Many of the leading marijuana stocks have already embarked on major cash saving endeavors.
This includes cutting staff and halting large amounts of cannabis production. With this, many leading cannabis companies have been able to stockpile cash in amounts larger than ever before. Once we are able to move past this current level of volatility, the hopes are that we can begin to see the market stabilize more than ever.
The Ebb and Flow of the Cannabis Market
The cannabis market and other stock markets are all effected in an ebb and flow pattern. In the past three weeks, it has been almost non-stop losses. But, Tuesday, March 24th, showed the largest one-day gains in almost a century. This further highlights the fact that markets will always fluctuate in both directions. During the trading day on March 25th, we saw some of the leading cannabis stocks shoot up by as much as 20%.
Others shot up by around 5-10% which is still quite large considering the losses taken on in the past few weeks. Although this may not be a signal that we are out of the woods, it is without a doubt encouraging for investors. Many investors have begun to take a back seat to the market while it settles out this latest issue. As we sit in waiting, now is the time to begin refining our trading strategies for the future.
Is now the Time to Think About Gains?
While Tuesday and Wednesday’s gains are extremely encouraging, it is difficult to believe that bullish patterns can remain in the short term. The reality is that we are far from the end of this coronavirus related market collapse. But, the cannabis industry continues to hold investor’s attention as well as a lot of potential for the next few years. Once the dust settles, it will be easier to see which companies are holding more inherent value than others.
In addition, this market crash has helped to further highlight some of the most important issues that cannabis stocks are facing right now. Well investing in the market in the present day may present some tricky challenges, it does look like we are on the way to overcoming this global tragedy.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | email@example.com