Surging cannabis stocks blaze past cryptocurrency bubble of 2017: experts
The cannabis industry is slowly emerging victorious in a long-standing battle over its legality against governments across the world. Marijuana is being legalized in several countries and cannabis businesses are gaining popularity. The exponential growth of the industry is being commented on by many business experts.
Cryptocurrency advocate Michael Novogratz said the marijuana industry showed a ‘promising future’. “Listen, the weed business has a great underlying story, a lot like cryptocurrency. In five or six years, we will have a monster weed business,” he said.
Shares of the Canadian cannabis producer Tilray Inc shot up 13% over the week and have more than tripled in value, posting a monthly gain of 221%. This unprecedented gain in cannabis stocks is being compared with the sudden surge in cryptocurrency prices in December.
Fit for only short selling!
“With a bubble beginning to form comparable to bitcoin and even the ‘Dot Com’ bubble of the late 90’s the average investor is going to suffer. With these frightening volatility levels and no previous history of stability, trading cannabis stock cannot be perceived as a sound long-term investment,” said Ken Mahoney of Mahoney Asset Management, according to a report.
Novogratz also sides with Mahoney regarding his opinion that weed stocks are all about short selling. “Get a borrow, short it for a day trade, make some money,” he advised.
“This is like Bitcoin levels, the kind of move Tilray is making. The market is completely irrational. [Tilray’s] market capitalization is over $4.5 billion. That’s insane,” said Jason Spatafora, a cannabis investor who runs marijuanastocks.com.
Cryptocurrencies and cannabis share another similarity – both have been frowned upon by many in the general public. This has been a major reason why both these nascent markets have faced strict regulatory scrutiny. Both have fought innumerable legal battles to become recognized in the mainstream markets.
Image via Marijuanastocks
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