3 Reasons Why You Should Invest in Cannabis
The cannabis industry’s growth is expected to more than double in the next five years or so — and now is the time to invest!
With more and more states decriminalizing and legalizing cannabis, the opportunities in this sector have just begun.
Recently, cannabis stocks that trade on the U.S. stock market rose after Democratic vice presidential candidate Kamala Harris announced the plan to decriminalize marijuana.
Even though it’s been down the past year-plus, does that mean now is the time to invest in cannabis?
Today formed hedge fund insider Lance Ippolito wants to cover three reasons why you should be investing in cannabis and the advantages this sector has over trading on the S&P 500.
3 Reasons Why You Should Invest in Cannabis
1. It’s Not Dependent on Overall Market Direction
Everything is dependent on China, tariffs and currency wars, which means there’s no reason why you should be thinking about or looking at the SPX.
And here’s why…
You wake up one morning and there’s good Apple news or even China news and the S&P 500 hits 3,000. Then the next day, there’s negative news and the S&P pullsback to 2,859.
And where will it go tomorrow?
I don’t know, but what I do know is that you’re dependent on the overall market direction.
You’re playing after the market — you’re dependent on whether the S&P goes up or down. And when there’s overnight news, you can’t prepare for that.
However, you can prepare yourself for the future by investing in cannabis due to the massive amount of short interest since few people are talking about it right now after a down year.
2. Invest in Cannabis Because Its Weekly Moves Are Above Average (Ideal for Day and Swing Traders)
For example, Canopy Growth Corp (NYSE: CGC) moves an average of 7% weekly compared to the S&P 500, which moves less than 3% per week.
You’re not going to have an S&P 500 stock like Apple Inc. (Nasdaq: AAPL), Amazon.com Inc. (Nasdaq: AMZN) or Netflix Inc. (Nasdaq: NFLX) experience these types of moves unless it’s earnings or major positive news.
But by trading cannabis stocks, you have the opportunity to catch double-digit gains most weeks.
3. Its High Short Float Means Great Potential for a Short Squeeze
Additionally, cannabis stocks have high short interest, and if you’re a day trader you can take advantage of that opportunity.
For instance, Aphria Inc. (Nasdaq: APHA) experienced a short squeeze last year that increased its share price by 40%.
Lately, cannabis stocks are rallying higher and have gone up since the market sell-off.
I’ve had consistent days where I see cannabis stocks that are up 10%, 15% and even 20% — while my S&P 500 stocks are down by 2% to 3%.
If you want to take advantage of these actionable trades, then start trading cannabis stocks today — and if you don’t, comment down below why you wouldn’t invest in cannabis. We’d love to hear your thoughts!
1 Comment
I made out very, very well with the Canadian Cannabis stocks in 2018-2019 but got out completely when the stocks tanked due to many factors with oversupply, poor management, Canada’s restrictions on the industry etc. It is really not up to Kamala or any President to make it legal in the US. The DEA and Congress must change the scheduling from 1 to 3, 4 or 5 and then it is up to the individual states to decriminalize it according to the votes of their residents. Trump has said that he has no major objections to cannabis (although he neither drinks nor smokes) but wants the individual states to handle the legal issues once it is rescheduled. . The job creation and tax revenues for the States is so major, that it is hard to imagine that the states would not go along and treat it in the same way they do alcohol consumption . Plus the medicinal properties for all sorts of health issues are amazing but more research is needed. . Once the DEA and Congress agree to move Cannabis off of the Schedule 1 , the flood gates will open big time, in my humble opinion and research will really take off as will the growth of the industry in the US. I speak only from my personal experience and am not in any way associated with the industry.