Cannabis Market: Canada’s legalization of recreational marijuana is boosting the fortunes of cannabis stocks
Summary
The cannabis market has great potential for generating more profits for investors and companies in the future. The industry has grown massively following the legalization of recreational cannabis use in Canada, making the country the trading center for legal marijuana in the world. At the moment, there are not many companies involved with marijuana exclusively making the competition fierce, leading the industry to grow even bigger.
The three leading companies, Canopy, Aurora and Tilray, which are involved with marijuana exclusively, will lead the market to new levels; however, companies such as Anheuser-Busch, AbbVie and Alita which are involved with cannabis in a more indirect way, will influence the cannabis industry to a great extent as well. In the stock market, due to the nature of their business Cannabis stocks have been very volatile making them a risky investment at present.
Pharmaceutical firms producing Marijuana for medical purposes were major driving forces in the industry.
The share price for AbbVie and Altria reacted positively following the news that Canada had legalized recreational marijuana use.
Canopy, Aurora and Tilray shares weren’t the exception either, as they experienced high volatility due to short selling under a six-month period.
Scope
- Assesses the cannabis market
- Examines the potential threats in the market
- Assesses the performance of cannabis companies
Reasons to buy
- Did the cannabis market produce revenues?
- How likely is more countries to legalize recreational cannabis use?
- Which are the best cannabis stocks for 2018?
- Is Canopy Growth the best cannabis stock for 2018?
Table of Contents
Overview
Catalyst
Summary
The marijuana industry is booming as more countries are legalising recreational use
Legalizing recreational use of marijuana on October 17 2018, made Canada the world’s trading center
Trading cannabis in the stock market can be highly profitable under the right circumstances
Cannabis producing companies have experienced massive growth over a four-month period
Cannabis stocks have experienced high levels of volatility due to short selling and fraud allegations
Canopy Growth will potentially lead the market in the future
Why Canopy Growth stands out from the majority of cannabis producing companies
Analysis of Canopy shows that growth is set to continue in the future; however, investment has to be approached with caution
Conclusions
The cannabis market will grow even bigger if more countries legalize recreational marijuana use; however, as growth will increase potential issues will emerge
Appendix
Further Reading
Ask the analyst
About the Author
Disclaimer
List of Figures
Figure 1: States that have legalized recreational marijuana use, 2018
Figure 2: AbbVie, Anheuser-Busch and Altria Group share price 2018
Figure 3: Canopy Growth, Aurora Cannabis and Tilray share price 2018
Figure 4: Aphria share price
Figure 5: Aurora share price 2017-2019 $
Figure 6: Canopy Growth share price $
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- AbbVie
- Alita
- Anheuser-Busch
- Aurora
- Canopy
- Tilray
