Cannabis trades better on Wall Street than gold
In the last year, cannabis stocks exceeded gold, bitcoin and other assets in the market in general. As investors buy shares in the heyday, companies dedicated to the sale of cannabis for medicinal use are seeing their valuations rise.
According to the Bloomberg Intelligence Global Cannabis Competition Index, the price-to-sale ratio between the valuation of companies and the value of their shares is in three digits. Canopy Growth, which is valued at US $ 11,400 million, currently trades at a price-to-sale ratio of 132, and Aurora Cannabis, valued at US $ 9,200 million, traded at 106. GW Pharmaceuticals is at 231. To compare, Apple and Amazon have a price-to-sales ratio of approximately 4.
Global spending on cannabis products will more than double to $ 32 billion in 2020, according to estimates from BDS Analytics, a data services firm specializing in the cannabis industry.
The first marijuana company was included in a stock exchange in the United States in February, which represented a milestone for the industry. Since then, other marijuana companies have traded on the major stock exchanges at the same time as Apple, Microsoft or Facebook. Canopy Growth was incorporated in May. In July it was followed by the Canadian firm Tilray, whose valuation in the market shot up by 800%, reaching US $ 14,000 million.
The shares of all the listed marijuana companies increased 96.56%, only in August. By way of comparison, the financial sector gained 1.13% during the same period and the S&P 500 index, which lists 500 companies in 11 sectors, rose only 0.74%.
The alcohol and tobacco companies are looking closely at these companies, says Medical Marijuana CEO Stuart Titus.
Constellation Brands, owner of the Corona beer brand, recently invested $ 4 billion in Canopy Growth. At the beginning of September it was reported that tobacco company Altria was “exploring its options”. Coca Cola also expressed its specific interest in producing cannabis drinks. And immediately Pepsico joined with the same objective.
Pharmaceutical companies are also studying the market. According to a recent medical cannabis analysis, total sales in the US are expected to increase in US $ 10 billion for 2022.
The analyst and CEP of Medical Marijuana Stuart Titus estimates that 40% of all drugs could be replaced by cannabis products and this generates great resistance to legalization among the players in the industry.
With information from Market Watch
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