Cannabis Stock Market – Can It Avoid the Downturn?

Cannabis stocks have been in a downtrend for the past few years. Some stocks may never recover to their all-time highs. Shouldn’t the cannabis stock market soar given the legalization of cannabis in several states? Could it be that the cannabis market is oversaturated? Were Cannabis Stocks Overpriced? Can Cannabis Stocks Avoid a Market Downturn?

What Caused the Cannabis Stocks Downturn?

Let’s take a look at what caused several cannabis stocks like Tilray, Canopy Growth Corporation, and Aurora Cannabis to fall.

When Tilray shares went up for sale, the stock saw immediate growth of 500% in three months. This shows that Tilray was overbought and overpriced at the time. Plenty of people bought into the hype surrounding this cannabis stock, and the stock likely won’t get anywhere near its all-time high for years to come.

Although Canopy Growth Corporation was doing great, it was also eventually bought because of the cannabis hype of 2018. CGC recovered very well in early 2021. After that, however, a massive sell-off ensued. The people who held out when the pandemic started took the opportunity to sell. Since then, Canopy Growth Corporation has been in a downturn.

The same happened with Aurora Cannabis. People bought into the hype and the stock ended up being overbought. Though ACB was doing well despite being overbought, its growth was stalled by the economic fears of the pandemic. Just like the entire global economy.

So what caused the cannabis stock market downturn?

The cannabis stock hype of 2018, many cannabis stocks ended up overbought.

Why Hasn’t the Cannabis Stock Market Recovered?

The COVID-19 pandemic caused a global economic downturn and halted the growth of many markets. Including the cannabis market.

Is There Hope for Cannabis Stocks Now?

Absolutely. Things are looking good for the cannabis market.

The pandemic is over, economic growth can be established

Cannabis stocks weren’t the only stocks hit by the pandemic. It is possible that the entire COVID-19 pandemic has created a global bear market.

The growth of travel stocks and international stocks has been stalled due to the lack of travel, international trade and tourism.

But now the pandemic that has crippled our economies around the world is over.

As a result, stocks can now recover to pre-pandemic prices and grow even further.

Photo by R+R Medicinals

Legalization is increasing and opening up business opportunities

Along with the end of the pandemic. Legalization is opening up fast in the US.

In 2021, Virginia, New Mexico, Mississippi, Alabama, Louisiana, and Connecticut legalized marijuana. With more Americans voting for legalization in 2022.

As more markets open up for the sale of cannabis, the cannabis market will increasingly do business.

Products such as branded cannabis beverages, cannabis supplements and various cannabis products are being developed.

If these business trends are successful, we may see what is called product adoption.

When it comes to product acceptance, consumers are more inclined to buy and use these products.

The steps of a buyer’s journey include awareness, interest, consideration, testing, and acceptance.

As a result, when new cannabis products are successfully marketed, sales are increased and the cannabis stock market can thrive.

The volume increases, the interest in the market

Purchase volume is increasing rapidly for all cannabis stocks.

Volume means people are ready to return to the market.

Interest in cannabis stocks is high again.

The more cannabis news that comes out, the more volume.

The more the volume increases, the greater the buying pressure.

Can Cannabis Stocks Avoid a Market Downturn?

Downturns will always be part of economic markets. Hemp is no exception.

However, cannabis has a growing future. There is a possibility that cannabis will eventually be legal in all states in the United States. However, there are still 32 states in the US that have yet to legalize cannabis. It’s good.

As long as there is constant news about the legalization of cannabis, business opportunities and interest in the cannabis market will only increase.

Because of the potential of a world where cannabis is as popular as tobacco and alcohol, people won’t want to miss cannabis stocks. If cannabis reaches this stage, it’s likely that cannabis could avoid a future market downturn.

Have you invested in cannabis stocks? Do you believe in the cannabis market? What do you think of the future of cannabis as legalization spreads? Let us know in the comments below. Follow us for more cannabis information.