The time is right for repositioning cannabis investments

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The market lull is an opportunity for cannabis investors to review their portfolios

Even though, in the broad stock market, the situation is trembling in the middle of a world health crisis, the cannabis sector seems to be having better numbers. Last Friday, the cannabis stock market had a positive performance as the New Cannabis Ventures Global Cannabis Stock Index soared 14.3% from its all-time low that was set last Wednesday. Overall, cannabis companies declined by 8.5%, which is significantly less than the 15% drop in the S&P 500. With a market to the tendency to increase and the current stock prices near the all-time lowest, this might be the ideal timing for investors to make a profit.

In a survey made last week, overall pessimism among participants was revealed – over 70% of people were expecting the market to continue declining. Last Friday, the index closed at 19.38, which was better than Monday’s 18.99. For this year, the industry is expected to recover; however, not to the levels that it was back before things starting to drop for the entire industry. The recent bumps in the overall sales for the cannabis industry can be attributed to some short-covering. On top of that, all the commotion due to authorities suspending business activities has caused consumers to buy in bulk. For instance, Akerna soared to 19.2% from March 11 to March 18.

It is expected, as well, that, when some level of normality returns to the world, there will be two advantages for cannabis investors. First, the cannabis industry is far away from those days with a lot of stigmas, and it is now being considered an essential business, which helps future legalization efforts. Second, this coronavirus pandemic doesn’t seem to be ending anytime soon, so states authorities might turn eyes to the industry looking for more profit. Additionally, cannabis demands will continue high due to people trying to deal with increased anxiety and conditions coming from this public health crisis.