How Cannabis Industry Progress is Redefining Pot Stocks
With only a half-decade or so behind the cannabis industry at this point, marijuana stocks are still very much in their infancy. This is by no means a bad thing, but it is the truth when looking for pot stocks to buy. As the cannabis industry continues to mature, investors should always be watching the bigger picture. When the industry started out, it was completely medicinal. This meant that if you wanted to buy marijuana in the U.S., you would have to go through a somewhat arduous process of obtaining a medicinal marijuana card. In 2020, the process for getting marijuana is as easy as getting a cup of coffee.
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Many big-name marijuana stocks like Trulieve Cannabis Corp. (OTC:TCNNF) and Valens Corp. (OTC:VLNCF) have been able to make big names for themselves in the past few years. Other pot stocks like HEXO Corp. (NYSE:HEXO) and CannTrust Holdings Inc. (OTC:CTST) have had tougher times maintaining their positions in the cannabis industry. But, many liken the past few years for pot stocks to the early dot com bubble of the 1990s. Now that the bubble has burst, there is a great deal of room at the top for new pot stocks to watch.
The Current State of Marijuana Stocks
In the past few years, pot stock pricing has largely been determined by speculation. This is in great contrast to trading marijuana stocks off of fundamentals. Marijuana stocks like AbbVie Pharmaceuticals Inc. (NYSE:ABBV) and Altria Group Inc. (NYSE:MO) which have large operations outside of the cannabis industry, trade more off of the latter. Other pot stocks like Aurora Cannabis Inc. (NYSE:ACB), trade highly off of speculation. Both types of trading have value for investors, and both present challenges as well.
And in the past few months, Covid has been an extreme determinant of whether or not pot stocks are able to survive in a more competitive market. In addition, Covid has pushed cannabis demand to higher levels than ever before. This has meant that many pot stocks have come up to higher tiers of the cannabis industry. As the market continues to wax and wane, we will without a doubt see more changes go into place. For now, however, things do continue to look quite positive for pot stocks.
How Can We Better Understand the Future of Pot Stocks
With so many pot stocks to watch, investors can have a tough time choosing. But, one way to get around this is to use a long term investment strategy. Because the cannabis industry is still very much in its infancy, there is a great deal of potential down the line. By long term, investors usually mean the time frame of around 5-10 years. This should be enough time to see some cannabis stocks make large strides when compared to the rest of the industry.
And while the long term strategy may not be one for all to get behind, others may find it more feasible than day trading. However you trade marijuana stocks, the most important thing to consider is how much information can be found regarding a given company. With ample research by one’s side, finding the right pot stock to watch can be easier than ever imagined.
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