Marijuana Stock Forecast
There are millions of people who want to get their hands on legal weed. That much is a certainty, and that fact should lend comfort to marijuana stock enthusiasts who are currently getting killed on the market. Right now, the industry is going through a large correction, one that started in mid-January and is continuing apace this week, at least as of Monday morning.
But people asking why marijuana stocks crashed and if they should get out now are looking at it all wrong. Both Canopy Growth Corp (OTCMKTS:TWMJF), (TSE:WEED) and Aurora Cannabis Inc (OTCMKTS:ACBFF), (TSE:ACB) may be showing weakness now, but in the long term, I’m still very confident in their future prospects and the overall marijuana stocks forecast.
Both Aurora stock and Canopy Growth stock are down big—about 4.5% and 3.5%, respectively—in a single day. This continues a trend that began about halfway through January, which saw many major marijuana stocks get absolutely killed, dropping by about 30% in both cases.
Is this the end of the marijuana industry as we know it?
The answer is a firm “No.”
What the industry is experiencing is a correction after these companies shot through the stratosphere in late 2017, gaining hundreds of percentage points in value in a few short months. The market was in need of a correction and that correction hit in January 2018.
Were these companies overvalued? That’s a harder question to answer and one that we won’t be able to fully examine until marijuana is legalized in Canada and weed gains further traction in other countries around the world. But overall, it’s hard to be down on the marijuana stocks forecast, if you’ve been paying attention over the past couple years.
Much of 2017—with the exception of those late fall and early winter months—was stagnant or worse for many of the large-cap marijuana stocks. But if you held on to those stocks through the year and got through the tough parts, you were rewarded with a huge explosion in the weed price value.
Chart courtesy of StockCharts.com
My marijuana stock forecast for the remainder of the year is one that I believe will follow a similar pattern.
We may see Aurora stock and Canopy Growth stock falter for a few weeks, or even a few months, but as Canadian marijuana legalization nears in the summer, expect the value of these two companies to rally.
Of course, there are certain factors that could change the trajectory of my marijuana stock forecast.
For instance, U.S. Attorney General Jeff Sessions is still part of the Trump administration. His avowed distaste for marijuana as a legal product has never been in doubt.
But while Sessions may very well try to orchestrate a U.S. marijuana crackdown, I believe that he will ultimately be unsuccessful. President Donald Trump is no drug crusader, and with so much else on his plate in 2018 already, I doubt that marijuana registers at all for the president.
Times are tough in the marijuana market, no doubt. And they are likely to get tougher before the ship rights itself.
But there’s still a lot to love about marijuana stocks and I believe that if Canadian legalization goes smoothly, then this slump will last only until the hype train gets back on track in the summer months.
My overall marijuana stocks forecast: Ride out the rough patches because the road ahead is still looking mighty bright.