Let’s Face It: Marijuana Stocks Won’t Live Up to the Hype, say Motely Fool

They write

There are five good reasons to believe pot stocks won’t deliver the green to investors.

Here’s the precis

While some pundits would suggest that this is nothing more than a healthy pullback in an otherwise gangbusters growth industry, I’ve begun to lean decisively toward the opinion that marijuana stocks simply won’t live up to the hype — and I’ve got a handful of reasons to support my thesis.

1. Sales potential will initially be constrained by supply issues and Health Canada.

2. History says oversupply will decimate the per-gram price for dried cannabis

3. The black market won’t just disappear

4. Export demand volume is a complete unknown

5. Dilution is a long-term issue

To wrap things up, dilution also looks to be a long-term issue for pot stocks.

Read the full article at https://www.fool.com/investing/2018/08/21/lets-face-it-marijuana-stocks-wont-live-up-to-the.aspx


Over at RBC Capital the Business Insider reports


According to Business Insider, RBC Capital Markets estimates that legal sales of marijuana in the US could be worth $47 billion within the next decade.

“In this US, the legal cannabis category is set to grow at a 17% CAGR over the next decade to as much as $47 billion in annual sales (this compares to the current diaper category at $4 billion in sales),” analyst Nik Modi wrote.

“Driving the growth is recreational use of the product, particularly concentrates and edibles. Estimates already suggest that the US category alone is $50 billion, which compares to spirits $58 billion, wine $65 billion, and beer $117 billion.” RBC’s $50 billion estimate includes both legal and illegal sales, and it’s not clear what the percentage is of each.


RBC website: https://www.rbccm.com/en/