Marijuana stocks took a beating last month, despite legalization measures passing in Canada. But that’s not chasing off all investors just yet.
Cannabis investor Jason Wilson joined Friday’s Market Movers to discuss the future of marijuana stocks. He’s a partner at MJ Fund (MJ), the only U.S. based marijuana exchange-traded fund. MJ’s top holdings include Canopy Growth (WEED), Aurora Cannabis (ACB) and Cronos Group (CRON). Like most marijuana stocks, MJ declined last month – falling more than 20% over the past month.
“Even during that sell-off, we had more investors coming into our fund,” Wilson said. “So that’s a show that people are taking advantage. It is a buying opportunity. They’re averaging in. They’re weighing in.”
Wilson believes that investing in marijuana will be a long game as the space takes time to develop.
“They’re in for the long 10-, 20-year trend. It’s going to be a global market,” he continued. “It’s not just about Canada. It’s not just about the U.S. It’s a global movement right now.”
Investors can expect to see profit-taking as the industry grows, especially with each new development, he said. “You’re going to see a little bit of over-exuberance. And with every new announcement, with every new development, there’s, you know, a bit of a ramp-up, and then a little bit more profit-taking,” he said. “But it’s definitely maturing.”
The impact of midterms
And midterm elections could provide the industry the next boost. Marijuana measures are on the ballots in four states (including North Dakota, Missouri, Michigan and Utah), while another six gubernatorial races could have an impact.
Previous catalysts include full legalization in Canada, and FDA approval of the new GW Pharmaceuticals (GWPH) drug Epidiolex. The cannabis-based medicine is used to treat epilepsy symptoms.
“The next one here,” Wilson said, “would be whether or not — like, the STATES Act, if that gets — makes its way through.”
“And that could allow the industry to come out of its infancy in the U.S. as well, start competing with Canada.”
Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.
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