While some stocks see green, recent increases are not anticipated to last
As investors around the world buy into the bitcoin boom, Canadians are continuing to chase highs from the marijuana sector. The acceleration in cannabis stock prices has not been as dramatic as what’s been seen in cryptocurrencies, but that hasn’t stopped one expert from seeing a bubble forming.
“This is a frenzy the likes of which we haven’t seen since the dot-com bubble,” Barry Schwartz, chief investment officer and portfolio manager at Baskin Wealth Management, told BNN.
While Alberta and Quebec joined other provinces in tabling cannabis legislations, investors have been scrambling for shares in Canadian cannabis companies. A positive outlook, pushed by the telegraphed tailwind of federal legalization by 2018, has enabled pot stocks to experience double-digit advances in value in recent months.
But Schwartz still has his arms crossed. He noted that despite their rising valuations, most companies in the sector aren’t actually making money. He further asserted that “people who smoke marijuana smoke it already,” meaning there likely won’t be much demand to soak up any additional supply as producers go online.
“You’re going to lose all of your money if you invest in these companies,” he said.
“At the end of the day, I see cannabis as being a $2-billion-sales-a-year [industry] in Canada at most. “This is not an industry with a gigantic runway of growth or opportunity here,” he said. “It’s not like this is going to explode going forward, so I would run away.”
Related stories:
Two sectors to keep an eye on next year
Millennials to spur growth in pot investments
“This is a frenzy the likes of which we haven’t seen since the dot-com bubble,” Barry Schwartz, chief investment officer and portfolio manager at Baskin Wealth Management, told BNN.
While Alberta and Quebec joined other provinces in tabling cannabis legislations, investors have been scrambling for shares in Canadian cannabis companies. A positive outlook, pushed by the telegraphed tailwind of federal legalization by 2018, has enabled pot stocks to experience double-digit advances in value in recent months.
But Schwartz still has his arms crossed. He noted that despite their rising valuations, most companies in the sector aren’t actually making money. He further asserted that “people who smoke marijuana smoke it already,” meaning there likely won’t be much demand to soak up any additional supply as producers go online.
“You’re going to lose all of your money if you invest in these companies,” he said.
“At the end of the day, I see cannabis as being a $2-billion-sales-a-year [industry] in Canada at most. “This is not an industry with a gigantic runway of growth or opportunity here,” he said. “It’s not like this is going to explode going forward, so I would run away.”
Related stories:
Two sectors to keep an eye on next year
Millennials to spur growth in pot investments
