It was roughly one year ago that pot euphoria peaked. By the end of the first quarter of 2019, the Horizons Marijuana Life Sciences ETF was up more than 50% on a year-to-date basis, and over a dozen popular pot stocks had advanced at least 70%. With high-margin derivatives (edibles, infused beverages, vapes, concentrates, and topicals) expected to be launched in Canada and numerous U.S. states angling for recreational legalization, it looked as if nothing could stop marijuana's momentum.
Yet, one year later, "green" is something that the cannabis industry has not delivered for investors. In fact, if you thought the performance of oil stocks was bad, take a gander at some of the one-year returns for pot stocks, many of which have lost 50% to 95% of their value.
But there is hope on the horizon as this industry shakeout moves to eliminate weaker companies. No matter how dismal the news gets surrounding the coronavirus, the cannabis industry still has the potential to grow worldwide sales to $50 billion (or more) on an annual basis by 2030. This suggests that opportunistic investors who (pardon the pun) weed through a sea of bad companies to find the real standouts could make a fortune.