Currently, the stocks of marijuana producer companies in international markets are one of the most popular investments. The shares of these companies do not fall into the headlines as long as they are the subject of long-term investment conversations.
The health use of marijuana is legal in many countries. However, in some countries, recreational use has also become legal. Uruguay was the first country to legalize the use of recreational marijuana. Then, in some states of the USA legalization took place. Finally, the Canadian parliament has made it legal for the use of marijuana throughout the country.
These steps of the US and Canada have almost blown up the company’s shares. When the legal marijuana market exploded, the market valuations of the manufacturing companies were completely out of control.
The shares of Canopy Growth Corporation (NYSE: CGC), the world’s largest medical marijuana company, increased by over 400 percent in 12 months.
Canopy has a market value of about $ 15 billion. Of course, this is not an incredibly high market value for a well-known company. But what should be considered here is that the estimates indicate that the global medical marijuana sector is worth about $ 10 billion today!
This means that the market value of Canopy is 50 percent higher than the total value of the medical marijuana sector, which is just one company. There are hundreds of them right now Şu
Of course, there are some predictions that the medical marijuana sector will reach $ 150 billion by 2025 .
The North American Marijuana Index shows us a broader picture of marijuana market valuation. More than doubled since the year we left:
So far, we’ve just mentioned the legal use for medical purposes. Of course, more people will use marijuana for fun, not for medical reasons. Indeed, the main reason for the market is so swelling that no doubt the expectations.
But we have to admit that we are talking about a market where we cannot be absolutely sure that it will become more legal for entertainment purposes. On the other hand, the legalization process takes a long time and this is a big problem.
However, no one has a clear idea of what the supply-demand side for recreational marijuana use will be. Will more people use it if it is legal? Probably. At first, we can be sure that demand will be strong. But it is hardly rational to think that everyone will be an important consumer overnight.
Thanks to today’s technologies, wherever we are, we can invest in almost anything in the world, including the shares of marijuana producer companies.
Well, should this be a buyer in the market?
While market valuations are out of control, it seems reasonable to stay away from the moment when significant uncertainties such as legalization and demand remain.
The incident here reminds a little of the crypto money market in recent years. Last year was the year of crypto money. This year seems to be a good year to sell marijuana shares. After all, it is always possible to re-enter the market. But it is not possible to make money if you do not sell. It is important to evaluate opportunities on time.