Media reports have said people who have previously never invested in the stock market are now investing in marijuana stocks.
Marijuana stocks are bringing youngsters to the stock market and even people who did not consider buying shares a viable investment option are now looking to buy weed stocks, according to multiple sources.
Young Canadians have jumped into stocks amid frenzied investor interest in the marijuana sector as the country prepares to legalize recreational use in October. But the wild swings in cannabis stocks have been a rude awakening for some, underscoring the case for a more cautious approach especially for novice investors, a Bloomberg report said.
Word of mouth seems to the most popular reason for people investing in marijuana stocks. Youngsters are more likely to invest in something if they see a friend or acquaintance reap benefits from it. Financial investors and stock market related trading companies have reported a surge in the number of people asking about marijuana stocks and a heightened interest in the weed sector from investors.
However some experts have said that while the increase in interest is favorable, the hype surrounding legalization of marijuana is already priced into the stocks. Youngsters who are investing in the stock market for the first time should not just go with their gut instinct but should do some research before buying marijuana companies’ shares.
“Make sure you really do understand how the valuation is put together and why you’re paying the price you are paying.” a financial industry expert said in the Bloomberg article.
Meanwhile around the world the marijuana industry is watching Canada with a hawk’s eye as it legalizes recreational use. In less than a month, Canada will become only the second country in the world and the first G-7 nation to bring marijuana prohibition to an end, legalizing cannabis for recreational use. Surprisingly, the only country where cannabis is fully legal is Uruguay.
Legalization of recreational use of weed has many implications for Canada and its neighbor where the drug still remains illegal. Youngsters and elders alike have welcomed the legalization of recreational marijuana in Canada and marijuana stocks have seen the impact of the hype surrounding the industry.
Cannabis stocks have seen all time highs with bullish sentiments being propagated by the media and analysts. Youngsters looking to make some quick money from the weed sector are moving in fast. However, some investors are now starting to wake up and question the valuation given to marijuana companies in Canada.