What is the Ceiling for Marijuana Stocks?

This is going to the year that begins a massive growth period for marijuana stocks. 2018 can be the beginning of a nascent industry that has all the makings of providing for many people and businesses over the coming decades. With prohibition coming an end, it looks like there could the the potential for a serious business to take hold in the Western world.

Legal weed is a thriving industry in many states right now and it is sure to grow beyond just the small cluster of states it is living in right now. State governments will see the tax revenue growth in Colorado and California, propelling the speed of marijuana legalization throughout the country. More and more growers and distributors will expand, enhancing their profits and speeding up public acceptance. Eventually even the federal government will get on board.

In 2015 alone, Colorado collected $135 million of tax revenue on both recreational and medical marijuana sales. The projections have California, which recently legalized recreational marijuana, at $15 billion in sales revenue. That is a massive opportunity for economic growth and for market participants to make money. California is already growing its network of dispensaries and event media companies in Los Angeles are positioning themselves to take advantage of the growing advertising market for cannabis.

Trading marijuana stocks can be a real boon to your bottom line, if you know what to look for and how to value them properly. Plus, for day traders, the legalization is still in early stages throughout the nation and in many states, so the potential for volatility in the market is super high. That is good for day traders. Day traders thrive on volatility. With the uncertain federal regulation, the price of marijuana stocks can fluctuate greatly on a daily or weekly basis. So a trader with good working knowledge of the politics surrounding the industry could capitalize on that type of volatility.

With the marijuana market growing, but always in flux, the key for trader is to figure out which sectors of the industry are ripe for day trading. Publicly traded media companies that are looking to capitalize on an increase in marijuana-related advertising sales are a good bet. There is not much to suggest that any growth in that sector will be stable and worth a look for long term investors, but it might be the right place for day trades looking to capitalize on volatility.

Canada is a good place to look if you are interested in investing in marijuana stocks. Producers and growers are thriving in the country because of the favorable legal environment. And those companies tend to have assets in other countries in the world, so status as a multinational corporation is good for business. Take Alpharia, Inc. for example. The producer of medical marijuana and oils is a high quality stock that has risen a significant amount between 2016 and 2018. And with the market slated to grow over the next decade, it should be considered a good bet for the near future.