Why Cannabis Stocks Could Be Your Best Bear Market Investment

Stocks

There’s no better time than now to locate cannabis stocks with low valuations, especially if you want a good deal. The price-to-sales (P/S) ratio on the Nasdaq is at 4.9. With that in mind, consider the following stocks Tilray Brands (NASDAQ:TLRY), Cresco Labs, and Canopy Growth

Market Analysis of Cannabis Stocks

The prices of these stocks are much lower than the Nasdaq average. Furthermore, due to falling stock prices, they are far less costly per dollar of sales compared to this time last year, let alone the cannabis stock heyday of early 2021.

This implies that if you invest in cannabis, you will most likely receive more bang for your buck than if you invest in another growing business. For example, the average P/S multiple in biopharma is 5.3, making cannabis seem cheap.

Legalization is Getting Closer to Being a Reality in Key Markets.

Another compelling argument to invest in marijuana stocks during the bad market is that marijuana legalization may be on the horizon in the United States and the European Union. On October 6, the Biden Administration issued a statement declaring its intention to pardon federal marijuana possession charges. The statement also instructed the attorney general and the secretary of Health and Human Services (HHS) to investigate whether marijuana, which is now classed as a Schedule I substance like heroin, is appropriately scheduled. Suppose authorities determine that cannabis is improperly scheduled, considering the magnitude of its social and health implications. In that case, it might lead to significant advances in federal decriminalization or even full legalization, which would benefit cannabis stocks, to say the least.

In the European Union, cannabis will be legalized in Malta and Luxembourg in late 2021. Excitingly, Germany is moving to legalize the plant for recreational use, with the government aiming to complete the necessary legislation and regulations by the end of 2022 or early 2023. International growers like Tilray, an active participant in policymaking, currently service its medical market.

What Now?

Buying Tilray stock (NASDAQ:TLRY) now may be a good strategy to acquire a discount while also positioning your portfolio to benefit from legalization in the E.U. The same is likely true for investments in other cannabis stocks aspiring to enter the E.U. market, such as Aurora Cannabis. The drawback is that you’ll have to suffer through the rest of the bear market, and no one knows when it’ll finish.

Remember that when big markets open for recreational sales for the first time, today’s discounted values are expected to shift higher. If you’re not ready to take a bet on cannabis stocks now, the odds of a similarly compelling mix of events and trends in the future are substantially smaller.

Featured Image- Unsplash @ Richard T

Please See Disclaimer

About the author: Okoro Chinedu is a freelance writer specializing in health and finance, with a keen interest in cryptocurrency and blockchain technology. He has worked in content creation and digital journalism. Since 2019, he has written on various online platforms, and his work has been recognized by several important media sources and specialists in finance and crypto. In addition to writing, Chinedu enjoys reading, playing football, posing as a medical student, and traveling.