CBD News Pick – ValueWalk
A growing relative value trade may be emerging in the cannabis market and a September 12 report from Cowen and Company points to stellar industry profit potential. As the general public begins to understand nuance between the risks marijuana usage, making distinctions between hard drug addiction, the attitudes and politics are shifting to a consensus opinion that points to growth.
But with industry growth comes winners and losers. Cannabis investing is a fast growing field with opportunities to reach new heights, but also for major establishment players peril could be ahead.Cowen, for its part, raises a topic that might be the consumer discretionary stock story of for the next decade as one major sin industry, big tobacco, will likely be pitted against big alcohol.
Cannabis market growth projected to be a wet dream
With growth projected to reach $50 billion by 2026, cannabis is set to become the nation’s next “budding” industry, to steal a term from Cowen report. The future for weed investing looks spell-binding.
“Assuming federal legalization, we believe the formal, non-therapeutic cannabis industry can grow at a 24% CAGR over the next 10 years,” the report titled “The Cannabis Compendium: Cross -Sector Views on a Budding Industry,” noted. There are medical negatives to cannabis use, much like smoking a cigarette or consuming alcohol. But unlike hard drugs, the societal perception correlated to cannabis health risks “has fallen notably,” the report said. “Cannabis is generally considered less risky than alcohol,” the report stated.
There are medical negatives to cannabis use, much like smoking a cigarette or consuming alcohol. But unlike hard drugs, the societal perception correlated to cannabis health risks “has fallen notably,” the report said. “Cannabis is generally considered less risky than alcohol.”
Driving this trend are “notable changes in consumer behavior and sentiment, which in turn is driving votes.” More and more states are not only legalizing medical cannabis, but increasingly recreational use is being approved by voters.
The societal trend towards use is a documented to the point the Cohen analysts think cannabis stocks should be categorized as the Consumer Discretionary segment due to consistent customer demand. In fact, using Colorado as a benchmark, there is potential for regulated dispensaries to be more predominant than Starbucks in the near future, the report projects.
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