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What Made These Pot Stocks Drop in Value So Quickly?

Pot stocks have had better days, to say the least. Well, this sentiment can be shared amongst the entire stock market. With several issues currently plaguing stock prices, what in specific is causing marijuana stocks to drop so heavily in value? Well for starters, issues surrounding the Coronavirus have led the entire world market to see the worst declines in value in over ten years. Big-name cannabis producers like Canopy Growth (CGC Stock Report) and Aurora Cannabis (ACB Stock Report) dropped in value by more than 10% during the trading day on the second Monday of March. But, you might be wondering, what influence does Coronavirus have on marijuana stocks?

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The majority of the issues stem from Chinese production halts. China is the world’s largest producer of just about every product we know and love. This includes many of the products that help users consume marijuana including vaporizers and other smoking accessories. Because of this, many believe that China will not get its production up and running anytime soon. We must think, however, that despite whatever is going on in the world, people will still want to smoke weed. This means that we should not see a substantial drop in demand, rather the drop will be in the production of these products that help the market to run smoothly.

What Does This Mean for Pot Stocks Moving Forward?

One of the biggest reasons for the most recent decline outside of all other factors is investor fear. When big drops happen, they tend to ricochet around the entirety of the market. But, given that pot stocks are still relatively new, they are subject to greater bouts of fluctuations than many other markets. In addition, the majority of pot stocks in the industry are still showing some pretty negative signs as far as profitability.

But, this has been a concern for some time. Now, however, may be the time that those fears are playing out right alongside the greater market fluctuations. The most difficult aspect to contend with is that nobody knows when this volatility will end. Coronavirus looks like it is here to stay for at least some time, which means that high price swings could be as well. As we all weather the storm, we can use this period to examine the signs that lead up to this very moment.

How Can Cannabis Investors Leverage the Market Decline?

When any industry declines in value, it presents an opportunity for investors to get in at bare-bones prices. This is exactly the case with cannabis stocks right now. Many of the most popular pot stocks have hit extremely low prices over the course of the past two months. But, future projections remain unchanged for sales of cannabis within the next five to ten years. This means that we could see a return to a bull market in the near future.

Well, this may seem a ways away, it is still a very real possibility. For now, it is about waiting to see when cannabis stocks begin to regain values. As we await this bearish market to turn, now is the time to research and find value wherever it may be found.

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