Pot stocks on the run. Should we consider?

This time last year, the talk of the town amongst traders and investors alike was about crypto currencies. After the massive rally in December and January, value in all the cryptos dropped sharply and we now have more of a stable market.

Today, a lot of us have forgot about cryptos and the focus is now more on cannabis stocks.

In a previous article I have already explained several reasons that to me marijuana investing is more of an opportunity than what cryptos can, at the moment, offer.

About a month passed since I wrote that and several of these stocks continued to grow exponentially.

At the time, the most valuable publicly traded pot company was Canopy Growth with a market cap of over $10Billion. This title was held up till yesterday as another company, Tilray, which went public just in July has just surpassed Canopy. Tilray’s initial price in July was just $17 but in recent days it skyrocketed well past $200. It is very impressive to note that in a matter of two months, this company is worth more than $20Billion – more than American Airlines or Expedia! 

The recent price push came after the US Drug Enforcement Administration (DEA) signed off Tilray’s plan to import marijuana from Canada to the US for medical research.

With the legalisation of recreational cannabis use in Canada coming to effect next month, we will surely see more interest surging in this type of markets. (see performance below of Canpoy Growth, Cron and Aurora over a one year period against the S&P500).

Although volatility will be extremely high, I personally think that it would makes perfect sense to have at least some minor exposure in one of these companies in a market that is already established and posed for growth.

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