Cannabis stocks have been on an absolute tear this year, but some analysts are predicting that the momentum may be slowing down. The main reason is because of the recent decline in cannabis prices.
The cbd stocks to watch is a company that has been in the cannabis industry for years. They have seen many highs and lows. Currently, there are questions about whether or not this company will see more success in the future.
In 2022, where do you think pot stocks will be?
To some, the fact that we’ve already completed two-thirds of the year may seem alarming. With the majority of 2021 behind us, it’s time to look forward to what 2022 has in store for marijuana stocks.
I, for one, am still a big fan of marijuana stocks.
When it comes to the marijuana business, it’s important remembering that I’ve long been a buy-and-hold advocate. And, to be honest, that approach has earned a lot of money for many people.
Innovative Industrial Properties Inc (NYSE:IIPR), Curaleaf Holdings Inc (CNSX:CURA, OTCMKTS:CURLF), and Canopy Growth Corp (NYSE:CGC)—though CGC stock was definitely more reliant on timing than the other two—have all experienced significant increases.
StockCharts.com provided the chart.
For years, early investors in marijuana companies have been earning enormous profits. However, relying on previous performance to guarantee future success is never a smart idea.
Having said that, marijuana stocks have a bright future.
Many of the favorable factors that propelled the industry to its present level remain in place, while fresh innovations continue to propel the market ahead. These innovations have the potential to propel the market to new heights in 2022 and beyond.
I’ll be completely honest: forecasting the condition of the economy in 2022 is a difficult task.
Many factors must be considered, including how the ongoing COVID-19 pandemic will be managed, how much money the Federal Reserve will continue to pump into the market, how low interest rates will remain, and the amount of pent-up investing and spending by white-collar workers who were essentially homebound for a year.
But there is one thing that is certain: the marijuana business will expand.
In the past few years, the cannabis industry has progressed by leaps and bounds, from complete legalization in Canada to incredible advances in the United States, as well as incursions into Europe, South America, and the Middle East.
Investors are salivating at the possibilities that billions of dollars in anticipated income (the illegal market for marijuana is valued over $100.0 billion) would offer to marijuana businesses that can best capitalize on the situation.
It must be stated that legalization is a volatile game, dependent on shady politicians who are typically from an older age and have a War-on-Drugs mentality (at least in the U.S.).
Of course, this is changing as the old guard is replaced by fresh blood with much more libertarian views on marijuana use, but it will take time.
Currently, federal legalization in the United States (the Holy Grail of the marijuana industry, as I refer to it because of its magnitude) is closer than ever to becoming a reality. It’s still still a few years away, with President Joe Biden’s opposition to any kind of pro-marijuana legislative action acting as a stumbling block in the path of legalization.
Despite this, the majority of Americans favor marijuana legalization, and state lawmakers have had some success enacting legislation repealing marijuana prohibition at the state level (often without first conducting public referendums).
This growing governmental acceptance of marijuana is good news for marijuana companies. However, although state-level legalization will continue apace, federal legalization is unlikely to happen anytime soon.
However, as I previously said, one thing we can rely on is continuous development.
First, the illicit market for marijuana will gradually shrink as more individuals abandon their former dealers in favor of legal companies. As manufacturing gets more efficient, this trend is being expedited by decreasing legal marijuana costs.
Another significant advantage is that marijuana stocks are often well-liked by retail investors. And, given what happened with GameStop Corp. (NYSE:GME) and other “meme stocks,” there’s a good possibility that more retail investors will turn their attention to marijuana companies.
Better still, marijuana stocks offer a plethora of realistic possible development pathways, all of which I believe are very likely. There aren’t many meme stocks that can claim the same.
And there’s more good news: vice products, as they’re known, are recession-proof, pandemic or not. During economic downturns, for example, alcohol sales rise, and preliminary research indicates that the same is true for marijuana.
So, even if we see additional economic lockdowns in 2022 (let’s hope not), there’s little reason to believe it will have a significant effect on marijuana businesses’ profits, and it may even promote greater sales.
Expert Opinion
To summarize, 2022 seems to be a promising year for marijuana stocks. Due to deflated marijuana stock prices as a result of the early-pandemic market fear, there’s already a good possibility of a rally in the sector’s future.
Overall, marijuana stocks are gaining a lot of traction.
I’ve been writing about marijuana companies for years, and this is the best opportunity I’ve ever seen, assuming investors choose the right firms.
There’s still a lot of space for marijuana equities to rise, and many investors will profit handsomely from it.
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