WARSAW, Poland —
Similarly to the crypto industry, the cannabis market exists in a regulatory gray area, is highly volatile, and thrives off media buzz and millennials’ excitement — yet has significantly better prospects with the US regulators, Coinpaper analysts argue. Over recent years, steps to decriminalize marijuana in the US and Canada have helped the cannabis industry gain momentum, but now most marijuana stocks’ prices are far below their 2021 bull market highs, which represents an attractive investment opportunity for those willing to navigate this high-risk, high-reward market.
Analysts believe that the following factors may contribute to the resurgence of the cannabis market in North America:
More states are posed to legalize adult use of marijuana for medical and recreational purposes, including Florida, Ohio, and Pennsylvania
Federal decriminalization of marijuana enjoys strong bipartisan support, as the majority of Americans across all political lines favor legalizing cannabis use
President Biden’s pot pardon will reverse decades of War on Drugs’ harms to Black and Brown communities
Biden’s push for reclassification of marijuana from a Schedule I drug is expected to move marijuana policy into the public health realm and away from the criminal justice system
The Secure and Fair Enforcement (SAFE) Banking Act of 2023, should it pass the Senate, will allow banks and credit unions to provide financial services to cannabis businesses
US cannabis market is expected to grow at a compound annual growth rate of 14.2% to reach $40.1 billion by 2030, driven mainly by the growth of the medical segment of the industry
The US marijuana industry is still nascent and not as consolidated as other industries, which opens up a plethora of opportunities for savvy investors, with companies like Green Thumb Industries and Curaleaf Holdings poised for strong growth, analysts estimate.
The industry, however, is not without risks: since most marijuana stocks trade on OTC markets with little to no regulatory oversight, it opens the door to potential scams and market manipulation of marijuana stocks. Legal risks also exist as the industry’s growth is tied to legislation. Finally, marijuana companies’ valuations are oftentimes based on speculation and future growth potential rather than current financial performance, which can lead to inflated stock prices.
Read the full report at Coinpaper.com.