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The coronavirus pandemic has created an extremely intimidating investor space for marijuana stocks. The illness has had a massive effect on the cannabis market, bringing top pot stocks to their knees in the past few weeks. But, w have seen this kind of volatility in the cannabis industry, so we shouldn’t be scared right? Well, the short answer is that until this event comes to a more stable point, volatility may remain extremely high. Canopy Growth (CGC Stock Report) has lost more than 50% of its value in only the past month which is quite substantial. Other pot stocks have seen similar losses in value in the same time period. So with all of the large selloffs occurring in the market right now, what can we expect to occur in the next few weeks?
Why Coronavirus Could be a Challenge Moving Forward
The panic surrounding the coronavirus has not only hit cannabis stocks. In fact, the whole world’s markets have seen extreme amounts of volatility in the past two months. But, the cannabis industry has its own troubles to worry about. For the past two years, we have watched the industry evolve and grow. Much of this growth has been great, but there are still some factors that have not been addressed in the industry. For one, many cannabis stocks have yet to turn a profit. With the current state of the industry, it seems as though profits could be very far on the horizon. Of course, this depends on how long and how severe the coronavirus pandemic gets in the next few weeks. In the short term, however, things do not look to be too great for any facet of the stock market, let alone pot stocks.
Some have stated that the coronavirus will have massive effects on world markets for quite some time. This slightly relates to the cannabis industry given that many leading pot stocks rely on China for the production of their products. These products, such as vaporizers or cannabis accessories, are necessary to keep people using cannabis. With a manufacturing slow down, these products could be far behind schedule. But, China is already stating that it’s the number of cases is declining which could be good news for cannabis stocks.
The World’s Response is Positive for Pot Stocks
One of the positive aspects of this pandemic (if there are any), is that it has brought the world closer together than ever. This means that the entire planet is working tirelessly to slow the spread of coronavirus. Because of this, we could soon see the effects of this ailment begin to lessen around the world. The hopes are that if this occurs, coronavirus’ grip on the cannabis market could soon lessen. Studies have also shown that the pandemic has led to more and more people to consume cannabis. This means that the demand for the product has skyrocketed in only the past few weeks.
So, is the coronavirus the reset button for an industry that has struggled heavily for months now? Or, is this just another speed bump on the road to seeing greater gains in the cannabis market? Well, for now, it seems that things are up in the air. A lot depends on what happens in the next few months. If all things go according to plan, hopefully, thee cannabis market and the world overall, can begin to return to normal.
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