The summer of 2019 has not been favorable to all pot stocks. Shares of following symbols and are all down more than 31% from their highs earlier in the year.
So is this a bubble bursting? Not at all and here is the reason. Marijuana Index have faced worse declines than what they're experiencing right now just less than one year ago we’ve seen declines of up to 69%.
So does this change the outlook of the cannabis industry? No, its growing pains. Let’s start with Canadian market, retail sector haven't unlocked their grand opening doors in a expedited fashion as projected. And the supply chain is still getting their footing, and issued not to be alarmed about, because they will correct in the near term and analyst are still forecasting in North America a $55 billion market within 5 years.
If these forecasts are half right then the cannabis market has not seen a bubble because in order for to be a bubble to exist there would have to be over valuations.
But here are some trepidations. The Canadian cannabis market might not grow as quickly as analysts expect. But just wait for the U.S. to exit out of prohibition, this will dwarf top Canadian cannabis producers to enter the U.S. market. If historical charts are a guide, this down adverse run won’t last very long.