Are Canadian Marijuana Stocks a Boom or Bust Industry?

by Dale Harris

Canada just passed a major overhaul to their marijuana laws. But don’t light up your bud in celebration just yet. This overhaul was intended as a way to expand the adoption of medical marijuana in Canada and set the stage for recreational use in July of 2018.

While the Dude can abide legally in a lot of places in the U.S., Canada is more federated and their provinces move together on issues more often than the States south of their border.

But whatever your opinion on whether rolling up a joint should be legal or not, Canadian Marijuana stocks have gone up recently. So, it begs the question: should you invest in Canadian marijuana stocks now that things are moving toward legalization?

The answer depends on who you talk to. So let’s examine each side so you have all the tools to make your decision.

1. Don’t Buy Canadian Marijuana Stocks Because There Will Be Competition

If you’re at all familiar with economics, you’ll know that when supply is low and demand is high it’s a full on seller’s market. You can charge high prices and make a ton of money.

But when more suppliers come on the market, you have to drop your prices and you might not make as much money. With the possibility of recreational marijuana becoming legal and the expansion of medical marijuana in Canada, more people are going to open up dispensaries.

If you can find online dispensary Canada stock, you might be safer because those will be hyper-regulated. But even then, the new regulations mean a spike in demand and even more government backing for new dispensaries.

In fact, according to the Canadian government, the number of eligible Marijuana patients has increased by 10% and sales have grown roughly 16% per month. We can speculate that with the government reporting on these things, they’re aware and will be more willing to license and approve more dispensaries soon.

2. Do Buy Canadian Marijuana Stocks Because There Will Be Massive Demand

If we can divert our eyes from Canada for a moment and look south toward the ruddy state of Colorado in the United States, we’ll see that a green rush is a great thing for investors.

Colorado saw massive growth in both medical and recreational stocks after they legalized. Even if most jurisdictions didn’t get on board with the trend right away.

Now Colorado is booming. But competition from Canada and now Mexico will stifle their market. Which means you should continue to look at Canada as the next boom marijuana market.

Back in March of 2017, Marijuana stocks in Canada were up 290% from the previous year and the market seems stable and possibly growing. And with good news coming out of Ottawa, it’s possible cannabis stocks will grow exponentially over the next year.

Conclusion: Be Wise

With such a young market, you need to be wise. Make sure you do your research and weed out the bad eggs. Companies will rise rapidly and fall quickly.

Our advice? Stick with proven Marijuana stocks. These companies will have the production to weather competition.

Source: articlecity.com