The Green Mile: Investing in Cannabis

A close inspection of the experience of many cannabis investors over the last year will likely reinforce the old adage that timing is key. If you hopped into the market at the right time and bought $1000 of Canopy Growth about two years ago, you would now have over $12,000.

If you had decided to jump in later on and bought in just before the legalization date (October 17th, 2018) then you would have had to endure some serious drops. On October 15th, 2018 Canopy closed at 73.75 CAD and on December 24th, 2018 it closed at 36.34 CAD.

Bloomberg has compiled consensus expectations and these indicate that Canopy may continue to generate losses in operating income and earnings per share in the short term.

Traders who are actively looking to hop on trends and ride the right short-term waves will have had a lot of ups and downs throughout the craze of marijuana stocks. For investors who are looking at playing the long game, these green investments may not be the right choice.

Marijuana will very likely become a solid investment in the future but the industry is too much in its infancy for any key player to have properly cemented themselves thus far. Risk can be great when leveraged properly but the industry has yet to undergo further regulation from the government and even more aggressive competition internally for a diamond in the rough to be determined. There’s an Amazon or Facebook of marijuana out there, but it may not have let its seeds take root yet. Until then, it may be wise to wait until the smoke clears.