Cannabis “is a huge opportunity” for long-term investors, says Ross Gerber
The consolidation of cannabis stocks since their February highs holds great potential for long-term marijuana investors, according to an investment advisor.
“For investors who are looking at the long term, this is a huge opportunity as the cannabis players have only gotten stronger over the past year,” said Ross Gerber, President and CEO by Gerber Kawasaki Wealth & Investment Management, on Yahoo Finance Live. (video above).
“The numbers I looked at for the quarter, the most recent quarter, were incredible,” he added. “And these are very well run companies that are now trading at multiples that look very reasonable for their shorting and long term growth rates.
Over the past year, Gerber noted, Gerber Kawasaki has been up “noticeably” on cannabis – although he returned half of those gains last year.
“I’m very close to pulling the trigger and adding to these positions right now, aggressively,” he said.
Gerber also took issue with the idea that the growth of the U.S. weed market could slow, even as some Canadian cannabis companies struggle for profitability.
“There is no slowdown in cannabis,” said Gerber. “And, in fact, I would say the opposite. The new products that are coming out of drinks and some of the new edibles, but really on the beverage side of the cannabis business is that stuff is booming. We see now approved cannabis salons everywhere, one in Vegas, for example.
In total, he estimated the US cannabis market to be between $ 70 billion and $ 100 billion, “and we’ve only scratched the surface.”
Cannabis companies ‘are home runs’
Some Canadian cannabis companies, like Canopy Growth (CGC), have made deals to enter the largest US market once the sale of cannabis becomes legal at the federal level. And once federal law loosens banking and tax restrictions, “these companies are home runs,” Gerber said of the North American business mix.
However, Gerber pointed out one caveat that could hamper cannabis stocks: delayed marijuana legislation.
Currently, cannabis is legal recreationally in 18 states and licensed for varying medicinal purposes in 29 other states. It is considered illegal in Idaho, Nebraska, and Kansas.
“I think the biggest problem is the legislation and the fact that Democrats really can’t do anything,” he said. “They are really proving to be inept, disorganized and basically stupid at this point… I just feel like they’re covering things like cannabis, which is just a home run.
That said, Gerber noted that he expects some legislative movement over the next year to lift the federal marijuana ban or ease some of the banking restrictions on cannabis companies, which will catalyze the next step. in the cannabis market.
Grace is Associate Editor for Yahoo Finance and UX Editor for Yahoo Products.
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