Forget Bitcoin - Cannabis is the New Crypto

It could be said as one speculative frenzy vanishes, another develops from its ashes. Right now, this is exactly what is happening with the cannabis as investors are jumping onto the marijuana bandwagon in droves.

Not that long ago, marijuana was making more headlines than crypto as the stocks of companies linked to the cannabis craze got caught up in a mania that has effectively sent the prices surging.

At the end of September, references to cannabis in news articles nearly doubled the amount mentioning crypto, according to data compiled by Bloomberg. Many of the analysts have argued that the surge in interest is being driven by desire to know how to buy marijuana stocks. 

But not only investors are following the craze – companies are on board as well.

Mention Cannabis and see how your stock goes to the Moon

New Age Beverages Corp. shares have tripled this September. Alkaline Water Co.’s stock more than doubled. And IntelGenx Technologies Corp. did that in a single day in mid-September.

These companies have little in common apart that their plans in the emerging legal cannabis market have caught investors’ attention.

To illustrate this, let us take a look at the New Ages Beverages, which makes trendy Kombucha drinks. In a conference presentation earlier this September the company executives showed a slide titled “Tested CBD Beverage in CO,” referring to drinks infused with marijuana-derived cannabidiol. The stock added $14.5 million to its market capitalization that day alone, ending the session at $94.4 million.

See the image below from Bloomberg for a better visualization.

And this is only one among many examples as to how this craze has overtaken the crypto rally. Even such companies as Coca-Cola and Shopify are exploring how to benefit from this booming trend. The former is interested in CBD-infused drinks, while the latter one is becoming the website provider of choice for Canada’s pot rollout after signing deals with several provinces and companies, including Aurora Cannabis, to host sales channels.

Marijuana ETFs

For those who prefer to get diversified exposure to the marijuana sector, the ETFMG Alternative Harvest ETF (NYSEMKT:MJ) has held itself out as a first-moving marijuana-focused exchange-traded fund for U.S. investors. The ETF has already attracted more than $700 million in assets, and the latest gains for cannabis stocks make it likely that the fund will bring in even more money, especially given its 50% upsurge in the past six weeks. 

Alternative Harvest holds nearly 40 stocks, including not only marijuana producers but also pharmaceutical and biotech enterprises looking at the potential uses of cannabis in the medical profession and consumer-oriented businesses that have expertise in selling smokable products. Yet, four of those marijuana stocks really stand out for their remarkable performance so far in 2018. All four have doubled this year, and they all seem to have potential for further growth in the future. These are Tilray, Canopy Growth, HEXO and TerrAscend.

Bringing it all together

So here it is – the new crypto has born, and its name is cannabis. People are going crazy for it, so you better include it in your long-term company vision (in addition to Blockchain, ICO and your own crypto).

On a more serious note, it is a very interesting and strongly emerging trend. I can assure you we will be hearing a lot more about this extremely unpredictable space in the days to come.

?P.S. You might enjoy my earlier pieces as well:

?? Crypto is NOT a Bubble. Never was, and hardly ever will be

?? Investors won't see Bitcoin ETFs any time soon. Here's why

?? All you need to know about Bitcoin ETFs now

?? FinTech Predictions for 2018

?? Blockchain Predictions for 2018

?? Bitcoin is NOT a Currency, and Never Will Be

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at one of the leading alternative banking and payments providers in EEA, I'm an active member of FinTech community and a TechFin evangelist.

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