The cannabis stock market is strong, giving investors good reason to pick up some extra stocks
Cannabis stocks should be able to take advantage of a sustainable bull market. American stocks should be a good investment choice for cannabis stocks in the coming months. Many American cannabis operators are up year-to-date, while almost all Canadian licensed producers are down. California could be one of the most dynamic markets, while New Jersey could fuel legalization of cannabis throughout the east coast and investors should watch offerings.
The largest American operators have scaled up production and are expected to try and raise equity capital after relying almost exclusively on debt capital and sale-leasebacks over the last year. Curaleaf and Trulieve both sold stock recently. A strong balance sheet should separate winning companies from others. Many smaller American operators, as well as large and small Canadian operators, will be in a need-to-raise mode.
In regard to federal legalization, if Democrats gain control of the Senate and the White House, expect the bulls will kick it into high gear, anticipating full legalization of cannabis on Joe Biden’s inauguration day. You can take advantage and sell into that rally. If the Democrats do take control of the Senate, consumers might then be able to use credit cards for purchases, and producers could get loans from banks, trades would be possible major exchanges outside Canada.
Cannabis stocks continue to be an interesting emerging sector and could profit greatly in a sustainable bull market. A massive spike could be fueled by the elections in the GOP loses control of the Senate.