It’s starting to look like perhaps cannabis stocks may have hit rock bottom this week. After shares across the board fell lower and lower in 2023, there is a slight uptick recently. But it’s not necessarily due to cannabis stocks themselves.
It seems as though Canadian investors may finally be interested in looking for growth stocks again. Companies continued to hit 52-week lows again and again over the last few months, especially among cannabis stocks. As earnings continue to roll in across the board, however, some investors are jumping on the opportunity to buy low.
This may include those companies in the cannabis market. After hitting 52-week lows, Canopy Growth (TSX:WEED), Tilray (TSX:TLRY), Aurora Cannabis (TSX:ACB) and others all saw an increase in share price. Canopy Growth stock is up 5%, Tilray stock is up 27%, and Aurora stock is up 12% since hitting 52-week lows.
What about the cannabis industry?
News in the cannabis market hasn’t had anything too crazy to allow for a larger increase. However, this could change in the near future. More and more states in the United States continue to climb aboard the cannabis train, with the multi-billion-dollar industry promising more tax incentives and job growth.
In April, Delaware became the 22nd state to legalize recreational marijuana. However, it looks like Ohio, Pennsylvania and Florida may be next on board. This could occur as soon as the end of the year, if perhaps not next year during the next election.
Florida has already been making headlines, as the state recently passed legislation this month to allow medicinal cannabis patients to renew prescriptions through telehealth appointments. While it still needs to run up to the governor, it’s looking promising in such a conservative state.
More movement could come from the Senate soon, as the Secure and Fair Enforcement (SAFE) Banking Act could be passed. This would protect banks that work with cannabis businesses in states where it is legal.
Still a waiting game
Right now, cannabis stocks remain in a waiting game. Each of these companies will continue to have to prove themselves and their path to profits. While Tilray stock remains the only profitable one of the bunch, others may soon climb towards it. But most are awaiting legalization in the United States for that to be a sure thing.
This is why so many cannabis stocks have expanded to other sources of revenue. Tilray stock, for one, now has partnerships for beer production. Canopy Growth stock touts its BioSteel as a huge win. Aurora stock, meanwhile, has remained focused on the marijuana industry, and looks to expand in the medical marijuana sector. However, it’s also had to sell much of its locations and medical marijuana acquisitions to bring in funds.
These cannabis stocks may be on the upswing for now, but it’s still a very volatile market. If you’re interested in cannabis stocks over the long haul, then great! These three cannabis stocks may be a great option.
However, if you’re hoping for a quick turnaround and growth that we saw back in 2018 and 2017, I would hold out longer. We still need a lot of legalization to occur not just around the world but specifically in the United States. This would make the country the largest producer and consumer of marijuana in the world, creating a huge opportunity for investors.
Until then, however, perhaps it’s better to wait on the sidelines.