Marijuana News Today
In the war between the world’s vices, it appears that marijuana is destined to overtake alcohol. That’s according to an analyst note from RBC Capital Markets that’s making headlines in the marijuana news today.
The firm estimates that legal sales of marijuana could reach $47.0 billion within a decade. Of course, this is discounting the massive black market operating in the background and is not accounting for the possibility of total U.S. marijuana legalization.
RBC Capital Markets says that spirits hit an estimated $58.0 billion in sales revenue in the U.S., wine $65.0 billion, and beer $117.0 billion, putting marijuana very much in the conversation. (Source: “Legal marijuana could be worth $47 billion in the US alone, according to a Wall Street analyst (STZ, CGC),” Business Insider, August 22, 2018.)
And that’s with legal barriers impeding growth of the marijuana sector, not to mention that the drug is still very much taboo for a good chunk of the population that grew up under pot prohibition.
The business potential for marijuana after several decades of being legalized is huge.
What This Means for Marijuana Stocks Long-Term
Obviously, massive revenue projections are going to help bolster confidence in the young marijuana industry. It also helps divert attention from doomsayers who continuously spout off about stock overvaluation.
Marijuana stocks are priced right now with the global market in mind. This market is always expanding and will continue to do so until marijuana becomes just another legally permitted vice like alcohol. That’s all but inevitable as country by country—or in the U.S.’s case, state by state—the drug is being legalized.
Furthermore, these projections demonstrate that the multi-billion-dollar cannabis industry is still very much in its early stages.
It’s easy to get dissuaded at times from investing in the marijuana industry because you think you’ve already missed the bus (or, in this case, the mystery van).
But that’s not the right attitude. There is still huge growth potential in the sector and there will be for years to come before the stocks become appropriately priced.
You don’t need to take my word for it. Just look at companies like Canopy Growth Corp (NYSE:CGC). This is the largest marijuana company in the world and yet was able to net a 50% growth week.
Legal cannabis is still an emergent industry and will continue to behave as one for the at least the next couple of years. That means massive growth and, of course, high volatility. But it is more often than not worth the risk, as marijuana bulls have seen triple-digit gains over the past couple years. And those gains continue to rise.
With Canadian marijuana legalization on its way and Wall Street coming around to the idea of a legitimate marijuana industry, the future looks bright for pot.
Cronos Group Stock
Speaking of Wall Street, it bears mentioning that companies on the U.S. stock exchanges are going to be uniquely positioned to yield the fruits of the marijuana industry’s growing acceptance in the U.S.
The marijuana news today shows that institutional investors are coming around to the marijuana industry and that the pot stock market has rewarded companies that have been bold enough to put themselves on the Nasdaq and the New York Stock Exchange.
For example, Cronos Group Inc (NASDAQ:CRON) stock gained a huge boost when it jumped to the Nasdaq. The listing has rewarded Cronos stock owners with impressive—if volatile—gains in 2018.
Although multiple industry-wide corrections wiped out much of those gains, the stock is up about 10% on the year.
And this past week, the company won big, scoring several supply deals in Canada in two major provinces: Ontario and British Columbia.
As a result, CRON stock is up about 15% in the past few days. That number is continuing to climb, with Cronos stock registering a four-percent jump in early-morning trading today.
Another pot stock on the Nasdaq, Tilray Inc (NASDAQ:TLRY) will go down in the history books as the first marijuana company to have its initial public offering (IPO) on the Nasdaq.
And the results have been spectacular. Tilray stock has jumped triple-digits since its IPO a few weeks ago.
On top of those gains, we’ve seen the company continue to rise on the back of the current industry-wide bull run. TLRY stock has gained about eight percent since the beginning of this week.
While there are those who believed that Tilray stock was more hype than substance, I believe that the company is very strong and that it should see sustainable gains to finish off 2018.
CRON & TLRY Stock Performances
Check out the chart below of the recent performances of Cronos stock (black line) and Tilray stock (blue line).
Chart courtesy of StockCharts.com
The marijuana news today shows another institutional investor warming to the legal cannabis industry as it rises to challenge Big Alcohol’s dominance over legal vices.
We’re going to see that battle continue to heat up, and legal marijuana is certainly expected be at a similar level as alcohol in terms of revenue in the next few years.
As such, we have a young industry with huge potential to grow, making it a ripe target for investment.