Canopy Growth Corp. is pushing cannabis stocks higher after the company announced the acquisition of U.S. multistate operator Acreage Holdings Inc. The cryptocurrency market, by comparison, has slowed down.
Cannabis and cryptocurrencies are two investment avenues that are both considered to be ‘high-risk,’ but could just as well produce some of the best returns in 2019.
Recently, there has been much discussion on whether investors should look to cannabis stocks or cryptocurrencies for the best place to park their investments. Although both have experienced significant gains so far this year, the news of Canopy Growth’s new acquisition may give the cannabis industry a slight advantage.
Cannabis Stocks Stay Bullish
GMP analyst Martin Landry recently upgraded Canopy from a “buy” to “hold,” according to MarketWatch.
The cannabis giant recently bought the rights to acquire U.S. multistate operator Acreage Holdings Inc. as soon as marijuana is formally legalized in the United States. With the acquisition, Canopy will now have a foothold in the U.S. cannabis market — which is 10x larger than Canada’s. Acreage already has operations in some 20 states, with 87 dispensaries and 22 cultivation sites.
Canopy made the acquisition for $3.4B.
The Cryptocurrency Market Stalls
Both cryptocurrencies and cannabis stocks have brought investors over 50 percent returns so far in 2019. Although the future looks promising, they are both hampered by a familiar problem: the legal situation.
The cannabis industry is dependent on legalization efforts on the legislative level which would provide the boom needed for a massive rally of cannabis stock prices. Although these stocks have risen in anticipation, this could easily crumble if the political situation becomes unfavorable towards the industry.
Similarly, cryptocurrencies are hampered by legal questions on multiple fronts. With the Internal Revenue Service (IRS) continuing to remain silent on taxation questions, and most tokens lying in limbo on whether or not they’re considered securities, investors are cautious.
There’s a reason cannabis stocks and cryptocurrencies are often grouped together. Currently, they both have pressing legal questions still unanswered. However, they are also both positive long-term bets — considering they have established themselves as formidable market sectors.
With Canopy’s latest acquisition, it seems that cannabis stocks have the leg up on cryptocurrencies for investors looking for high returns—at least for now.
Are you investing in cannabis stocks or cryptocurrencies? Or both? Let us know your thoughts below.
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