At the start of 2019, the marijuana industry was the 'new' hot investment. By the end of the year, no one was bragging about owning shares in the industry. Why did this happen, and is 2020 going to be more of the same, or should you consider buying into the up and coming industry now?
The marijuana industry still showed signs of becoming the next great thing early in 2019. The industry that was going to take the crown away from technology as the 'fastest-growing' sector in the market. In 2019 the 'pumping' of marijuana stocks ended. But that all came to an abrupt halt around July.
At that time, investors stopped believing the narrative that had been pushed for about 3 years prior. Legalized marijuana in a few States and Canada would help pave the way for global legalization and massive profits for all the companies involved. And don't forget about the new 'marijuana-infused beverage category, which spurred investments in all the big marijuana companies by all the big alcohol beverage companies.
No one wanted to miss out on the 'next big thing,' investors and multinational organizations.
Then reality struck when earnings report after earnings report indicated the industry was not profitable and way to segmented. Furthermore, the earnings reports indicated that while most investors and businesses in the marijuana industry wanted more States and countries around the world to legalize the use of marijuana, that the companies operating in the industry couldn't handle their current demand, let alone anything additional. Shortages in Canada plagued the industry in 2019 and highlighted the biggest problem wasn't opening new markets; it was how they would supply them.
Building new grow houses may sound simple. However, the red tape and political maneuvering typically haven't been easy. Also, in most areas that growing marijuana on a large scale is Continue reading "Will 2020 Be Different For Marijuana ETFs"