Tuesday , 3 August 2021

It’s Hard Not To Be Bullish About Pot Stocks For the Long Term – Here’s Why

…Almost every projection shows the marijuana market growing exponentially in the next few years…[which means] pot stocks…are projected to see major growth in the next few years [which will] radically boost the value of pot stocks…and that could make the present a very good time to invest in marijuana stocks..

…New Frontier Data says the U.S. marijuana market is set to grow at a compound annual growth rate (CAGR) of 21%, reaching more than $41.0 billion by 2025 – a huge upward gain from the $13.2 billion in 2019 – and we’re not only going to see growth in the U.S. Grand View Research, Inc. says the global legal cannabis market will be worth $84.0 billion by 2028. This represents a CAGR of 14.3% from 2021 to 2028. The growth is expected to come from the legal recreational cannabis market expanding and the medical marijuana sector developing more applications.

…With the election of Biden and the Democratic-controlled Congress, many people were bullish on marijuana stocks because more lax marijuana laws were thought to follow but the deadlock in Congress along party lines has dimmed much of that hope….(A marijuana legalization bill would need 60 votes in the Senate, which means winning every Democratic senator on top of 10 Republican lawmakers.)…Biden could enact executive orders unilaterally, but he’s shown little interest in doing that for pot legalization…but all this political back-and-forth and grandstanding across party lines isn’t going to stop the marijuana market from growing—nor marijuana companies from seeing revenue growth – and, as revenue grows, we’ll naturally see that correlated with the performance of marijuana stocks.

That brings us to a uniquely advantageous position: pot stocks are down right now [-6.5% according to the munKNEE Pure-Play Pot Stock Index – see here and here] due to the lost political momentum in the U.S….[making this the time to] capitalize on the old investing adage: buy low, sell high.

Conclusion

While pot stock investors are mainly paying attention to the progress of U.S. marijuana legalization organic growth is inevitable the marijuana market is going to grow as more and more people move their purchasing from the black market to the legal cannabis market and we’re also going to see a proliferation of new medical marijuana applications as more research opens up alongside legalization. Furthermore, as the industry matures, it’s going to find ways to create efficiencies and reduce production costs, which in turn will drive higher revenue.

When you look at the numbers, it’s hard not to be bullish about pot stocks for the long term and that’s why I’m still a staunch supporter of buy-and-hold strategies as this nascent industry continues to grow.

Editor’s Note:  The original article by Stephen Karmazyn, has been edited ([ ]) and abridged (…) above for the sake of clarity and brevity to ensure a fast and easy read.  The authors’ views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.  Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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