Published
5 years ago on
September 20, 2018
“Global spending on legal cannabis is expected to grow 230% to $32 billion in 2020 as compared to $9.5 in 2017, according to Arcview Market Research and BDS Analytics. The research projects a majority of that, nearly $23.4 billion will come from the United States. In context of more states voting in favor of marijuana use legalization and business interest sparking across the board, that definitely would make sense. As of June 29, 2018 the United States Marijuana Index, despite a lot of uncertainty around regulations, has over the past 1 year gained 71.49%, as compared to about 12% gain seen by the S&P 500. Given that is not exactly an apples to apples comparison, but it does make a case to at least investigate investments in marijuana stocks.”There is evidence to show that in practice this industry is huge too. Tilray are a Canadian cannabis firm, one that announced just yesterday that they traded around $6.5 billion worth of shares on United States exchanges, second to Amazon, who traded around $7.6 billion on the same exchanges. According to The Irish Times, Amazon have a stock 47 times the size of Tilray, therefore, we can truly appreciate the full scale of this as an investment opportunity.People absolutely love it. According to The Irish Times:
“Perhaps it’s no coincidence that pot mania comes as the crypto craze is dying off. The broader US stock market has churned higher on the strength of the American economy and surging corporate profits, with gains checked by relentless concerns over trade policy. With riskier markets like emerging equities in the doldrums, any sign there may be a fresh can’t-miss growth story becomes a target for the inevitable knee-jerk exuberance.”Are Cannabis Shares a threat to Bitcoin?Whilst The Irish Times are suggesting that the crypto craze is coming to an end, we know that actually, this isn't the case. Markets are stagnant but we are in a transition period. If anything, the crypto craze hasn’t yet begun. Cannabis Shares are more like traditional commodities and traditional stocks, therefore they are more attractive to high level and institutional investors. The level of cash flowing into Cannabis Shares is such, because institutions are investing in them. Cryptocurrency has not yet breached this level of the mainstream and therefore, there can’t be a threat from Cannabis Shares.I would expect that for individual and personal Cannabis Shares investors, many also invest in cryptocurrencies as both are new and exciting ventures, but overall I don’t think it’s fair to compare the two. Cannabis Shares aren’t a threat to Bitcoin and likewise, Bitcoin isn’t a threat to them. Many investments can exist side by side in harmony, just because Cannabis Shares a big now, it doesn’t mean people will stop investing in Bitcoin. Yes, for the meantime their attention may be diverted, but this will constantly change.References Investopedia The Irish Times Investment Disclaimer
