Cannabis industry volatile, but not in a bubble

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The current state of the marijuana market is typical of a new industry

The marijuana industry is still young in comparison to many industries. It is still fighting against a number of obstacles, from social stigma to regulations, but continues to receive more attention. As the industry grows and matures, it’s only common that the markets appear to be unstable. However, the current instability is more aligned with expected volatility and is not a sign that the industry is in a bubble that could explode.

Cannabis stocks have been see-sawing back and forth for the past several weeks. This is not unprecedented and has been seen in virtually every new sector after it has been introduced. From the dawn of stock sales to the personal computer industry, they have all experienced volatility and, in some instances, still are today.

According to William Patalon III, executive editor of Money Morning, “Cannabis is what’s known as an ‘enabling technology’ – meaning it opens the door to all sorts of other innovations. What’s more, this is a technology that’s going to touch virtually every industry you can imagine – from biotech/drug development to food-and-beverages, to general wellness, to entertainment … and more. And that means that cannabis, cannabinoids, and other forms of legalized marijuana are tremendously valuable technologies.”

Patalon adds that cannabis is a huge “wealth window” that has unlimited potential. However, no one can expect the market to launch and be stable. It is going to take some time for the industry to experience less volatility, especially during this era of continued adoption among domestic and international governments. Inarguably, though, marijuana has an incredibly bright future.