We’re 15 days into the new year and already we’ve had our fair share of nice surprises. Especially in the pot sector.
Taking a look at cannabis stocks in January, we can see the sector has made a strong positive move this week, and I think we’re going to see a lot of movement in cannabis long term through 2020.
There are two major catalysts driving the market forward…
First up, hemp.
USDA to Complete Hemp Cultivation Guidelines
I believe we’ll see the hemp industry significantly expand in the United States this year. As you know, hemp became legal as of the end of 2018, but government wheels grind slowly.
First we needed the USDA to put together guidelines. This meant the states had to participate in one way or another. And there will be other legal issues, like transferability across state lines and things of that nature. It’s a complex issue that takes time.
Have no doubt, though, the hemp boom is here. Plus, there’s positive news that supply/demand bottlenecks in Canada are getting resolved, which also bodes well for the sector.
Canada Finally Ready to Meet Demand?
This year we’ll really start to see Canada open up to the cannabis industry. The single-biggest issue that troubled cannabis stocks in 2019 was the slow rollout.
Canada ran into a lot of problems and that drove the news cycle all year in 2019.
I think some of the panic we saw was disconnected from the reality of the industry. Remember, this is something that has never been done before. Of course there will be hiccups.
One of the biggest so far was only allowing 20–30 dispensaries to open up in Ontario, the largest province by population in Canada. To correct the issue, Health Canada will now allow 250 total dispensaries in the province to better meet demand.
And that coupled with the U.S. hemp boom should translate into more profits, better earnings and subsequently higher share values.
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Chief Technology Expert, Technology Profits Daily