Action Investments Limited - Legal barriers are being lowered, the North American market is expected

Given that the industry-tracking AdvisorShares Pure US Cannabis ETF (MSOS) has dropped more than 60% in the last year, significantly outperforming the 14.5% drop in the broader market.
 
SHEUNG WAN, Hong Kong - March 21, 2023 - PRLog -- However, the business is nearing three big developments that may present new possibilities for investors as well as new threats. Let's take a look at how cannabis companies are likely to change in the coming years, beginning with the elephant in the room: legalization.

The most significant shift affecting cannabis stocks in the years to come is the possibility of marijuana legalization in the United States and the European Union. While the federal government has yet to decide whether or not to legalize adult-use cannabis, ambitious state legislators are already moving forward. Maryland and Missouri both voted in the most recent election to legalize adult-use cannabis, which means that new markets will emerge shortly in both states.

Furthermore, legalization is gaining traction in the major European Union countries. Cannabis markets, particularly in Germany, where an estimated 4 million individuals would consume cannabis by 2021. While there is no set date for recreational sales to commence, Tilray Brands Inc. (TLRY) is poised to profit the most because it now serves the country's medicinal cannabis sector. However, if other EU. If other countries follow Germany's lead and change their laws, there will likely be room for other operators to thrive as well.

One significant effect of the glut is that the average selling price per gram of legal cannabis is under pressure, resulting in lower sales and compressed margins. Another effect is that under Canada's marijuana regulations, businesses are only permitted to keep a certain amount of cannabis in their inventories, with any excess being destroyed.

The dynamics that led to a surplus in Canada is now manifesting in the recreational market in the United States, and they are likely to humble some of the better-performing enterprises in recent years.

As additional states legalize recreational marijuana beyond the 2022 election, and the likelihood of a change in federal regulations remains strong, competitors will be scurrying to capitalize on new demand. To do this, they will turn up the heat on cannabis products to 11. It's also logical to anticipate them opening a slew of new retail outlets to distribute their wares. And as long as demand appears to be high, they will most likely continue to expand their operations.

Please contact our team members to learn more about this unique financial building experience by way of good securities investment and portfolio management. Our aim is to make your wealth building journey, a simple and enjoyable experience. https://actioninvestmentsltd.com/

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Page Updated Last on: Nov 21, 2023
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