There’s no doubt that the coronavirus affected the lives of almost all people worldwide. Industries, in general, took a tremendous hit. It was as if an earthquake struck Wall Street, and no one knew where to run. In March, experts calculated that the “BEACH” group of industries suffered a loss of around $332 billion due to the crisis.
BEACH stands for booking, entertainment, airlines, cruises and casinos, and hotels. These five industries almost stopped functioning because everyone was staying at home and canceled all their outdoor activities.
How Did Cannabusiness Handle the Issue?
Around 14 million Americans use some form of cannabis products. That’s why many states in the US proclaimed dispensaries as essential businesses. That enabled recreational and medical cannabis companies to operate legally and without any obstruction.
Not all states got this benefit, though. This map shows that in many states, ordering and buying cannabis was not possible during the lockdown.
However, the fact that many states allowed businesses to continue running enabled the cannabis industry to handle the COVID-19 problem much easier than some other industries. Proclaiming cannabis as an essential product made a huge difference in keeping many companies going.
How Are Marijuana Stocks Holding Up on the Market?
In March, all stocks plummeted tremendously because of the global market crash. However, most companies working with cannabis managed to recover fast. By the end of the month, many got back up a few points, but still have a long way to go until fully recovered.
Is it Smart to Buy Cannabis Stocks at the Moment?
The cannabis industry will most certainly recover. The only problem is that no one can tell how long it will take for this to happen. The problem is not just in this sector, but also worldwide and across all industries.
The worst-case scenario is an L-shaped recession, which means we might need years, if not decades, to recover fully. If we take a more positive stance, everything should go back to normal by the next summer.
Why is this important? Because investing in cannabis companies right now, although perhaps a good idea, may take a lot of time before yielding any results.
Another important fact that everyone should consider is the upcoming events that may impact the industry’s growth. One of these is the US presidential elections coming in November, which will undoubtedly cause severe political turmoil considering the current BLM movement in the US.
In November, another vital moment is expected, this one more specific to the cannabis industry. New Jersey is supposed to vote for marijuana legalization. Four additional states are expected to do the same soon, but New Jersey is closest to legalization.
If the Garden State legalizes cannabis, this will open up another free market for companies, which means more profits and better share value.
Many stock catalysts cause shares to go up and down, despite how the company is doing. That’s the trick with investing in the stock market.
How to Make a Decision?
The key to profiting through stock trading is to buy shares for lower prices and sell them for a higher price. Having more shares from one company that makes a profit will also get you a part of the dividend payout at the end of the year, if applicable.
Since most cannabis company stocks are pretty affordable at the moment, buying seems like a smart move. Chances for these shares to drop additionally may be slim (but, of course, there are no guarantees). They will likely go up by the end of the year, although 2021 seems the more likely time.
So, if you have the funds and time to wait for a serious profit, consider going for it. If you’re looking for a faster turnaround, however, then you're probably better off trying a different industry.
With everything said above, we can conclude that buying cannabis stocks is worth considering. In the long run, investing is always a great idea. Think of it as an investment in your future.
Instead of putting your money in the bank, you can make a smart business move and expect a serious ROI after a year, if you make the right investments.
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