The past year of 2018 has been quite up and down for the world of cannabis stocks. Many investors saw some of the largest stocks in the industry hit with massive bouts of volatility due to the quickly shifting market. Much of these issues had to do with legislative battles in the U.S. and abroad, but it seems as though things are beginning to settle down for the long haul.
After Canada chose to legalize the use of cannabis recreationally nationwide, there soon became a domino effect of new laws around the world. The U.S. still has a long way to go before individual state acceptance of cannabis is broadcast on a wide basis, but the public opinion seems to be quite positive.
This coming year should continue to be exciting for the world of marijuana as new products and innovations are introduced into the industry. Next Green Wave (NGW) is one of the mid-sized producers of cannabis in the U.S. market. Based out of Coalinga, NGW saw its stock shoot up by more than 20% during the beginning of November, but as the market retreated, so did NGW. Next Green Wave currently has as much as 15 acres of approved cannabis zoned land. This adds up to a total capacity of around 350,000 square feet in the coming years. This type of growth capacity is quite high as most companies are simply working to get licensing to build out operations.
Next Green Wave also benefits greatly from their seed-to-sale business model which is one of the most prominent vertically integrated models to date. The company was able to raise as much as $21 million in capital to begin designing these new facilities, and it looks as though this will benefit their total output in the short term.
Tilray (NASDAQ:TLRY) should be a household name at this point. Tilray is one of the major industry players in the cannabis market which means they have a large correlation with fluctuations in the market. After the company debuted on the NASDAQ, their stock quickly shot up by as much as 470%. Of course, this valuation was extremely high and only led by speculative trading. Since that time, however, Tilray has managed to stabilize around the $100 level of support, indicating that investors are working to further find a sweet spot for pricing. Tilray has gotten a series of large investments from institutional investors which is all contributing to their spot at the top of the market.
Canopy Growth (NYSE:CGC) sits right up alongside Tilray as one of the largest names in the cannabis market. CGC saw its stock drop by around 25% during October trading as the rest of the market fell short as well. The rally for the pricing of Canopy has also tapered off slightly, but this does not account for the massive potential that Canopy has in the coming months. Canopy is considered to be one of the largest producers of cannabis in the world, and currently has a tight grip on the Canadian market. For this reason, slight valuation mishaps don’t seem like they will result in a large deal as trading issues wind down.
The 2019 year will likely be as exciting as the previous years in cannabis as new laws and innovations continue to be the primary source of growth.
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