The cannabis industry was brutally clobbered last year [- down 65% from its March/April peak – yet,] while it is possible for the cannabis bear market to persist in 2020, it is more likely that the industry will bottom out this year according to Will Meade, former Goldman Sachs analyst and now hedge fund manager. Here’s why.
Meade is excited by the selloff in 2019 as he believes:
- it offers a rare opportunity to get in cheap and that a small investment in pot stocks will generate millions in the next decades and
- the cannabis sector is similar to the tobacco industry in that:
- both asset classes are immune to the effects of a recession and, on top of that,
- consumers are hooked to the products of both industries.
According to Mr. Meade,
[Putting Meade’s tweet comments in perspective, the growth of $1,000 into $6M represents a return of 590,000% and, as such,] it may make sense to invest a few thousand dollars in a diversified basket of pot stocks to give yourself or your children a chance to reap tremendous profits.
Meade maintains that if there’s one catalyst that can resurrect the bleeding cannabis sector, it’s the prospect of legalization in big markets. In Illinois, for example, customers spent $3.2 million on the very first day (January 1st) that the state legalized recreational weed with dispensaries having to turn back customers due to statewide shortages.
According to Forbes, 16 states are likely to vote for marijuana legalization this year and such an influx of fresh demand would breathe life into the distressed industry and result in a big year for the troubled pot stock sector.