As summer draws to a close, the Cannabis sector is primed for another explosion…
1) Seasonal Trends
As the summer trading season draws to a close, historical data shows some encouraging trends for cannabis investors.
Multi-year charts show that the fall generates strong bullish activity in the sector that lasts well into spring. If this trend continues, investing between now and November could yield fantastic gains.
2) The Marijuana Index is at a Post-Peak low
The Ben-zinga Marijuana index has steadily declined since March of this year, and has started to level off. These lows indicate that the sector has cooled off and is primed for another boom.
Note that the index is a composite of the tickers in the sector, and does not represent whether any one stock is over or under valued. Look at individual stock history before you dive in.
3) Oregon and Alaska will vote on Recreational Cannabis
On the November 4th ballot for 2 states are measures that will allow the sale of recreational cannabis to adults 21 and over. If these measures pass, they will double the amount of states with recreational cannabis laws.
Polls show over 57% of likely voters in Oregon support the measure, though Alaska’s initiative appears to be trailing in the polls with currently between 44% and 47% of likely voters in support.
Even if Alaska’s initiative fails, Oregon’s addition into the recreational cannabis club will be a huge boon for the sector.
4) Florida, D.C. and Guam will vote on Medical Marijuana
Initiatives in FL and DC as well as Guam are expected to pass; Florida’s polls show support between 65%% and 82%, requiring only 60% of the vote to pass. Investors shouldn’t expect much directly from D.C. however, as the initiative is strictly for home-growing, not retail sales.
Polls show about 60% likely voters in Florida favor the medical marijuana amendment, with 17% unsure. Pollsters find it likely the amendment will pass.
5) Colorado and Washington are seeing Green
The “Experiment” in Colorado and Washington has been wildly successful. Not only has legalization been a tax revenue boon for the states, but the crime rate has dropped and cannabis usage has even leveled out or dropped.
Moreover, cannabis businesses are seeing crazy revenues and in many cases having trouble keeping up with demand. Cannabis stocks have similarly leveled out well above their previous lows.
A common refrain from naysayers during last season’s stock boom was “These companies have no revenue!” This is simply no longer true, and many of the publicly traded companies in the sector have had time to grow and establish themselves as legitimate, profitable businesses.
If you are new to the sector, or investing in general, check out our New Investor’s Guide to the Cannabis Sector!
Stay in the Green!