Interest in the stock market seems to be at an all-time high as the Reddit-inspired Gamestop story has been dominating headlines. The media loves covering cannabis and people love money, so naturally, speculation around the potential stock prices of cannabis companies are starting to make the news again as federal cannabis legalization appears to be on the agenda with the new changes in leadership.
Instead of focusing on the micro picture of day-to-day legislative battles or the timing of reform being approved by each chamber of Congress, bullish cannabis investors need to view themselves as arriving on the doorstep of the end of cannabis prohibition.
The short-term perspective sees the stalling of legislation like the SAFE Banking Act as problematic for capital; whereas the macro view understands that Biden’s election and a Democratic Senate sweep indicates a better path for legalization.
With some form of legalization already in play in over 40 states (medicinal or recreational), cannabis is quickly emerging as a major consumer packaged goods investment allocation. Valuations which were once seen as lofty, now look extremely attractive as both profitability growth and legislation are tailwinds for a sector that’s only just begun to ride.
The entire opinion piece by Tim Seymour and Brady Cobb, who both work in the cannabis industry, is worth the read. There are a lot of investment strategies and opinions and people should certainly do their homework before dumping their life savings into any type of stocks. There will be opportunities in the cannabis sector for sure, but as always, buyer beware. While you wait on full cannabis legalization and the ability to ride a green wave to extra money, please support small craft cannabis boutiques like Pendleton Oregon’s Kind Leaf, who are provided the best selection and quality while benefiting their local community and economy.