High Without The Smoke
The Market is still enjoying the “Tech boom”, after the 2008 depression as the different stocks keep hitting new highs more than once in a calendar year. The market has been bullish since the recovery of the 2008 crash, and most of this growth can be attributed to the Tech Boom; Tech startups getting funded ridiculously and entering the Stock Market at ages 3 and above after it’s establishment.
Tech companies were the first to hit the $1 trillion market capitalisation, and they are still the only sector in that bracket unless of course, the Saudi Aramco IPO with a valuation of $1.5 — $2 trillion breaks into that bracket. For now, Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Apple (NASDAQ: AAPL) keep waltzing in and out of the $1 trillion brackets as they want.
Talks about recession has been going on as regards the rate at which the bullish trend has continued, as it is believed that most stocks are over-valued as a result of the politics, on-going trade war between USA and China, and reversal of several of policies introduced by the Trump Administration (if he loses his re-election bid).
So, what is the next big BOOM?
There are several sectors to look at for the next boom, most of them are still linked to the Tech Industry, but they also have roots in other sectors as well (based on their functionality). Looking outside of these multi-linked tech sector stocks, we will focus on a new emerging sector, CANNABIS; the Medical and recreational aspect of cannabis stocks.
There are over 30 individual marijuana stocks and over 10 ETFs. The individual stocks are a combination of manufacturers and distributors for both medical and recreational cannabis.
Medical Cannabis
Medical cannabis is prescribed by doctors for a wide variety of health conditions and symptoms. For this reason, a prescription is necessary before he or she can get access to medical cannabis. It has been used to treat cancer, Alzheimer’s, different mental health conditions, multiple sclerosis, nausea, and pain.
Medical cannabis is legal in 33 states, District of Columbia and four permanently inhabited U.S Territories. There are limitations because of how the drug is viewed at the federal level. The Food and Drug Administration (FDA) has approved four drugs with chemicals from or similar to the ones found in the cannabis plant, to treat a rare and severe form of epilepsy in children. The agency has yet to approve medical cannabis as a whole because the U.S. Drug Enforcement Administration (DEA) still lists marijuana as a controlled substance. Medical cannabis has been legal in Canada since 2001 nationwide, although with a few regulations.
Recreational Cannabis
This is cannabis used for recreational purposes; in foods or smoking. It is legal in 10 US States (by January 1st, 2020), including District of Columbia and 2 permanent States, decriminalised in 16 States (by January 1st, 2020) and US Virgin Islands. It was legalised in Canada in 2018 and has been legal in California since 1996.
ArcView Market Research and BDS Analytics shared reports of their research as regards the estimated spendings on legal cannabis to experience a 230% worldwide growth, from $9.5 billion in 2017 to $31.3 billion in 2022. It also estimated that 33% of this spending is expected to go toward the medical cannabis industry. Most of this figure will be spent in the United States.
The pressure for the legalisation of cannabis for a recreational purpose has been in it’s highest in this decade than ever, and following the potential revenue Government’s stand to gain from manufacturers, distributors and consumers, the legalisation of Cannabis in more countries do not seem far off.
When that time does come, which side of the fence do you want to be on? Only early investors stand a chance to enjoy the sudden surged that follows the legalisation of cannabis in US and other countries, just like the surge the Alcohol stocks enjoyed at the end of the Prohibition law. The Wall Street Journal’s Pure Gossip column wrote that many felt the stocks had gone ahead at too rapid a pace.
Don’t get left behind
DISCLAIMER: This article is not to encourage the acquisition, sale and consumption of cannabis as it remains illegal in the Federal Republic of Nigeria. Rather, we encourage readers to consider Cannabis stocks in their portfolios, of course after their own research or that of their financial adviser.
