If you’ve been trading for over a year then you remember the craze that happened in 2017 with Crypto, Bitcoin and every other digital coin that was being touted as the “future of currency”. While I don’t doubt that sometime in the future we will live like the Jetsons or Star Trek, I don’t think it’s happening before 2020.
Unless you’re a die-hard $MJ follower or OTC trader you’ve probably never even noticed Cannabis stocks but over the last couple months these stocks have been popping on scanners making it hard to miss. Companies like $TLRY have IPO’s starting in the $20s only to ramp to $300 in 60 days! $CGC makes a $4 billion partnership with $STZ for potential Cannabis beverages, $NBEV also looking to get into that space. Similar to Crypto, companies are taking advantage of this craze throwing out PR’s that “they may be interested in a cannabis product or partnership” only to draw attention to the stock, drive the price up, then be sold into by insiders or bag holders waiting to get out. Also like the Crypto craze you have penny stock, OTC, and pink sheet cannabis companies being targeted as potential M&A candidates, partnerships with other industries and the die hard traders telling you they are going to be billionaires off this stuff. While I haven’t seen anything as crazy as the Long Island Ice Tea Company (formerly $LTEA) changing it’s name to Long Block Chain ($LBCC), as it’s known today, we have seen some crazy moves and crazy PR’s.
With all that being said, I think this craze is different. Crypto doesn’t have the support of major governments, doesn’t have any real world integration into main stream and is limited on its potential for now. Cannabis is the exact opposite. So far over 21 Countries or Territories have legalized Cannabis along with 31 US States having either Medical, Recreational or both. Based on what I’ve read so far Cannabis has the potential to disrupt major industries including Beverage, Tobacco, Medical, Pharmaceutical, as well as others we probably haven’t even thought about yet. Those visionary CEO’s that see this potential are not waiting or letting this slip by, they are investing and investing big.
So what does that mean for traders? In my opinion if you’re a long term investor you should do your due-diligence, find the companies like $CGC with great fundamentals, strong partnerships, industry leaders, and this could be something like $AMZN or $NFLX that starts at $5 and gets into the hundreds. If you’re a short term trader and want to ride the little waves, great!, there are plenty of opportunities and will be plenty more. If your a emotional investor and every little pull or sell scares you, this probably isn’t the sector for you. I feel that this is only in the infancy stage of it’s run with a bright future based on all the potential applications above. There will be companies that get bought out by bigger corporations, there will be speculation plays and their will be companies that can make in on their own but before you invest any money you should always do your homework.
This was written all based on my own personal research, opinions and is in no way investing advice.