Cannabis stocks, are they truly a lucrative investment?

Published Aug 21, 2019 01:00 p.m. ET
iStock / Aleksandr_Kravtsov

The cannabis industry is constantly growing economically. As marijuana legalization becomes a reality in many states, more people are eager to enter the industry. There are now more products on the cannabis market for medicinal and recreational purposes than ever before. Cannabis research has shown that cannabis is a potential source of pain relief for persons suffering from chronic pain and other ailments.

Due to the many health benefits associated with cannabis, many investors are willing to invest in the cannabis industry. Unfortunately, there are still some investors who are concerned about the stigmatization attached to marijuana. More so, investors are worried about the long-term profitability of cannabis stocks. The industry is still young and growing.

The question on most investors’ minds is whether investing in weed stocks profitable or not. Cannabis stocks have been featured on the stock exchanges since the legalization of marijuana for recreational use.

IPI Stocks

Innovative Industrial Properties is a real estate investment stock that has an interest in the cannabis industry. It has good ratings on the stock exchange.

The cannabis stocks are not so profitable on a large scale due to the debt of marijuana producers. These producers also spend a lot of money to expand the business.

Marijuana cultivators in Canada are constantly seeking more space to cultivate weed so that the consumer demand can be met with room to breathe.

Licensing and production issues can cause a decrease in stocks. As a result, the actual stock figures do not equal the estimated growth figures.

Profitability of cannabis stocks

These cannabis stocks should be observed carefully. Even though the cannabis stocks may not be generating much profit now in the short term, it will eventually be profitable in the long term. Investors should assess as to which stocks they should invest in for the future.

Based on IDB, there are many Canadian cannabis companies in the US stock exchange. Experts believe that some of these weed producers in Canada are worth billions of dollars. Some experts have even predicted that the alcohol and the pharmaceutical industry will suffer a loss because of cannabis stocks industry.

Due to the United States legalization of hemp, many Canadian companies such as Tilrayand Canopy Growth are making business deals to produce and sell hemp-derived products in the US.

Cronos stocks

Cronos stocks has been doing well on the stock exchange market. In February, the earnings per share was high, but in May, there was a fall below the estimated sales.

Canopy Growth Stock Chart

Canopystock value decreased in June this year, which came immediately after it was reported that the company had a financial disappointment in sales results. Constellation Brands, a beer company made investments of over $4 billion in Canopy stocks. Constellation Brands has made their disappointment with the investment known.

Aurora stocks

Aurorastocks had fallen on the stock exchange in July this year. Overall, IPIand Cronos Group have acquired financial benefit, but other stocks are not so profitable now. In the long-term stocks will prove profitable, so if investors are willing to be patient while waiting to reap interest, it may be a risk worth taking. However, that is only true if you are prepared to have losses on the journey to growth.

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