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Cannabis is among the most used drugs in the world. The reaction of people and governments has however remained mixed, and its positive and negative effects seem not to have been weighed properly yet. This is because the plant is believed to be medicinal as well as harmful to the body. While it is allowed in some countries, some countries still feel that the adverse effects are way heavier than the positive ones.
This is the more reason why the recent massive inflation in the industry (cannabis) has hit different people differently. Some people are surprised while others feel it was just a matter of time before this happened.
One CEO, while at the World Economic Forum in Davos, Switzerland, said to CNBC that the massive inflation should be approached with care and investors should be careful.
“Everybody wants to be in the cannabis space,” the CEO said, “And I think investors have to be selective because there will be a new name every week,”
He continued that, even though many people are entering the business, the question should be whether or not they can generate business.
This major venture into the cannabis business seems to have been triggered by the legalization of the plant in many countries. For instance, some states in the United States legalized it for various purposes. In November, Missouri and Utah approved its use for medical purposes while Michigan approved its recreational purposes.
The legalization of the plant does not stop in the US since Canada also shone a green light on its use for recreational purposes.
There are speculations or rather expectations of the massive inflation to grow even bigger basing on the comment made by the chief executive of Canadian Securities Exchange, Richard Carleton. The CEO said to CNBC that soon the USA might approve the use of the plant at the federal level.
This cannot be said for sure since there are still no agreements between major officials of the US. While President Trump’s nominee to lead the U.S Justice Department, William Barr, says he is not for pot, he still stands that the former attorney general’s reversal of the policy that eases federal enforcement of marijuana law was both uncalled for and did not respect the line between state and federal law.
As per the chief executive officer of the financial services firm Canaccord Genuity, this uncertainty of the US’ stand on pot will cause instability to cannabis stock.
However, generally, the cannabis industry is expected to grow despite the US uncertainty, and there are promising markets in Israel and Europe.