Cannabis stocks skyrocketed in the latter half of 2017 as the industry prepared for its two most significant adult-use markets to open in the new year, California and Canada. The trend was evidenced in MJIC’s North American Marijuana Index, which showed a 61 percent increase in December alone. It was an evenly spread out trend, as both U.S. and Canadian stocks caught fire in closing out the year, with the United States Marijuana Index increasing by 35 percent and its Canadian counterpart soaring by 65 percent. Major players in the sector such as Canopy Growth (TSX:WEED), Aurora Cannabis (TSX:ACB) and Aphria Inc. (TSX:APH) dominated headlines as their market caps grew, by some estimates, to overtake the size of the entire industry.
Marijuana futures dampened, however, as the promise of legalization took a hit in early January with the announcement that U.S. Attorney General Jeff Sessions would rescind the Obama-era policy known as the “Cole-memo” that allowed states with legalized marijuana free rein without interference from the federal government. Marijuana markets went into an immediate panic, shedding their late-year gains over a 24-hour period before CEO’s and industry insiders took to the press in an all-hands-on-deck effort to assure investors and shareholders that the industry would continue with business as usual. A small rally followed, but by week’s end, an all-out panic ensued in the market as cannabis stocks took their biggest hit in months.
Politicians and panics aside, it is hard to ignore the steady growth of the marijuana economy over the past year. With legalization spreading like a (no pun intended) weed across the globe, cannabis stocks are right behind bitcoin as the hottest investments to hit Wall Street since dot-coms first burst onto the market. Experts and analysts alike argue that marijuana is a speculative market; a bubble destined