The cannabis market continues to expand, and analysts believe stocks deserve more attention
The cannabis stock market continues to go through volatile times, causing investors to have multiple thoughts when entering the space. However, even with all that is currently going on, analyst Sonny Randhawa has determined that cannabis stocks are undervalued and explains the reasons why.
Randhawa, who works for Seaport Global Securities, is an analyst who wanted to give marijuana stocks some attention. He decided to throw coverage on a variety of stocks in the industry as he thinks a substitute scenario could develop in the future. Randhawa essentially focused on cannabis stocks like AAWH, CURLF, and GTBIF, which in fact, many other experts have expressed optimism on.
“With limited budgets, we believe new customer penetration rates could accelerate as consumers spend more time at home and the relationship between cannabis and alcohol continues to increase,” Randhawa said. Importantly, Randhawa’s ratings have achieved an average return of 10.5% over the past three months, which definitely adds to the value of his ratings.
The analyst sits on the assumption that marijuana is treated as a substitute for other substances and that price elasticity could come into play. According to many other specialists on the subject, this analyst’s opinion seems to be interesting and reasonable.
It is believed that the vertical integration that many companies are opting for will provide price and cost benefits. As a result, it is possible that key players within the marijuana industry will achieve impressive profit margins early in their business cycles.