The Rise and Fall and Rise of Cannabis
The unexpected beneficiary in the pandemic: cannabis. Yes, the substance that’s still illegal in 41 states made it onto the shortlist of essential businesses allowed to stay open. In the midst of record sales, cannabis CEOs are naming the current market as “Cannabis 2.0”, the maturity and recovery of the industry.
Investors rushed into cannabis stocks in 2018 with the hopes of earning fast and easy returns. Stock prices crashed in 2019 as companies failed to meet sales growth expectations or generate a profit. These companies had poor cost controls and lacked access to traditional banking services for loans. The ETFMG Alternative Harvest ETF ($MJ), a cannabis-focused ETF, lost over half its value after hitting its peak in 2018.
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