Cannabis has been touted as the greatest commodity since gold, sparking a “green rush” among many investors looking to get their hands on anything marijuana related since 2016/2017.
The past three or four years have been pivotal for Canadian cannabis producers, following the Liberal government’s legalization of pot, paving the way for Canadian investors to (legally) own a piece of a drug empire.
As most investors already know, the stock prices and valuations many cannabis producers had achieved as of early 2019 were ludicrous and the bubble has slowly begun to deflate over the course of the past year.
With most cannabis producers now trading at a fraction of their previous highs one year ago (many are down between 70% and 90%), the question remains among many investors interested in gaining exposure to any sector with explosive growth potential is: should I invest now?
The Canadian exchange traded fund (ETF) tracking the cannabis sector the Horizons Life Sciences ETF (TSX:HMMJ) is at all-time lows right now, and continues to trend lower in recent weeks amid a loss of investor appetite for risk, and very disappointing earnings and growth for the sector overall, post-legalization.
The black market remains strong, and the rollout of provincial stores (mostly government-run, across the country) has been very disappointing, leading many analysts to continue to downgrade Canadian cannabis producers, nearly across the board.
I would continue to steer clear of this ETF, any individual cannabis producer, or anything related to the cannabis sector for the foreseeable future.
Invest wisely, my friends.
