Canadian Pot Stocks in 2021: Are They Worth it?
Remember when seemingly everyone you knew had bought Canadian cannabis stocks and then they tanked? You might be wondering why things have gone fairly quiet since then.
Here is an analogy for you: Canadian pot stocks in 2021 are a lot like electric vehicles (EVs).
How is that exactly, you might be asking?
Here are three similarities and why this comparison is relevant to modern-day stock performance: One, both marijuana and EVs have been around longer than people realize; two, they both are considered “trendy” or momentum stocks; and three, they both have bright but also uncertain futures.
Adopting Change Takes Time
When Amazon and Apple stocks were in their infantile stages, people thought very little about them. If you bought low during one of these businesses’ IPOs or sometime in the early days, you could now be sitting on a goldmine.
This is all to say: technology is ever evolving. However, people are not always quick to adapt to change. Sometimes these changes take time. Legalized medicinal cannabis in Canada has only been around officially for 20 years.
While there are thousands of years of history for medicinal and recreational cannabis use, it is considered young in a modern Canadian economy. Look at the smartphone you now hold in your hand and think how different things looked two decades ago. And that really isn’t even that long.
A buy-and-hold strategy might actually be the best option when it comes to pot stocks.
Should You Invest?
Cannabis stocks have been volatile, to say the least. With that said, they’ve remained popular for day traders and long-term investors. Whatever your opinion or investment strategy, cannabis stocks may be a good option. However, any investment has risks, and you could lose all your money. Or you could end up filthy rich.
Laws change over time. When government policy dictates public behavior, you see shifts in the market. This is what it is important to monitor as you make up your mind about whether or not to take the plunge in Canadian pot stocks.
What’s Happening Now?
Much of the cannabis industry is made up of companies that are traded as penny stocks. Penny stocks are valued less than other companies. The good news is, though, you can buy them for extremely low prices. The risk is that they devalue and you lose all your money.
On the upside, you could buy numerous shares now and end up very wealthy later. For a more stable option, it is a good idea to look into the biggest players in Canadian weed.
Who Are the Big Players?
Canopy Growth and Aurora Cannabis are two of the most well-known cannabis stocks. These companies are traded on both US and Canadian stock exchanges. Having valuations over one billion dollars has made them big names on both markets.
What’s the Future of Cannabis Stocks?
Cannabis stocks took a major hit in March 2020, along with pretty much everything else on global stock markets. While they have not rebounded and had a rally like other industries, all hope should not be lost.
Back to our earlier analogy: GM first made electric vehicles in the 1990s. They were successful but then somewhat mysteriously were recalled and destroyed. Now GM is looking to reenter the EV market.
The point is, speculation comes and goes. Like EVs, cannabis stocks are a trend. Trends gain and lose momentum over time, so perhaps it is best to invest in what you believe the future of cannabis in Canada will look like.