With the latest figures showing inflation in the U.S. running 2% – 2.5% and with an increase of $1000 in medical marijuana prices in California, one has to ask – how will inflation influence the marijuana industry? This is an important question to ask as marijuana prices are increasing, and the Federal Reserve is expected to raise interest rates for the first time in almost a decade. If the Fed hikes rates, we will see increases in mortgage rates, which will lead to higher prices for home loans and other interest-bearing assets. For businesses, this will translate into higher costs for loans, employee salaries, and other expenses.
Medical marijuana sales have exploded in 2015, and are expected to continue to grow rapidly over the next few years. In California, one of the largest marijuana markets in the country, demand is booming so much that the state’s largest marijuana dispensary, Harborside Health Center, recently issued a formal complaint to the California Department of Food and Agriculture, asking the agency to consider marijuana’s status as a food. As the price of medical marijuana continues to fall, however, investors might want to consider a few things before they get too excited.
Marijuana legalization is spreading across the nation. While there are various debates surrounding the legalization of the plant, the most hotly debated is that of taxation. While it may seem like a great way for the government to collect extra funds, we wonder if this will really happen.
Are marijuana investors worried about inflation?
While trading in marijuana stocks continues in May, momentum in the sector continues to wane. Many factors have caused the entire stock market to fall. Some of these contributing factors may be caused by problems in other areas. Add to that the recent fear of inflation and the fact that some states may run out of gas. This also contributed to the decline in the market. It seems that the mood of cannabis stock trading is to buy the dip and hold the position. For some shareholders, however, the fear of uncertainty has led them to sell part of their MJ equity portfolio to offset current losses. But as some shareholders sell, the price of marijuana stocks falls even further. This encourages investors to come back and buy the same stock at a lower price. In addition to marijuana stocks, the cannabis industry also continues to run at full speed. With more states pursuing legal status and the fight for federal cannabis reform continuing, the future of the industry looks bright. Much of what lies ahead for the cannabis industry, particularly in the United States, will be largely legislative. In addition to the end of cannabis prohibition, the growth and progress of some cannabis companies has also paved the way for future innovations in the cannabis industry.
Cannabis industry and market information
For now, those who want to find the best marijuana stocks to buy still have time to do so. For now, the strategy seems to be to be patient and wait for a selling opportunity that will yield at least some profit. Still, some analysts think a better trading season is on the horizon for many marijuana stocks. The marijuana stocks mentioned in this article are a few examples of cannabis companies that could soon experience a turnaround in the market.
Marijuana stocks to watch this month
- Village Farms International, Inc. (NASDAQ:VFF)
- Innovative Industrial Real Estate, Inc. (NYSE:IIPR)
Village Farms International, Inc.
Village Farms International, Inc. is known as one of the largest and oldest manufacturers of greenhouse products in North America. Their subsidiary Pure Sunfarms is now one of the largest cannabis companies in the world. The company is one of the most profitable producers of greenhouses. Not only is it one of the best-selling brands in Canada. Recently, the company announced its financial results for the first quarter of 2021. During this period, Pure Sunfarms achieved 3 consecutive quarters of growth. This increase was 20% for retail sales of unbranded marijuana. The first quarter of 2021 was another strong quarter for Pure Sunfarms, which posted strong sequential growth in our priority sales channel – branded retail – for the third consecutive quarter, up 20% from the fourth quarter, which is particularly encouraging given that the Canadian market was weak due to pandemic-related restrictions that inhibited sales growth in the rest of the industry, said Michael DeGiglio, CEO of Village Farms. Our continued strong growth was again due to Pure Sunfarms’ leading position in the dried flower market1 , which remains our largest product category, and the success of our brand is firmly rooted in our reputation for high quality products with everyday value. But even with a strong earnings report for the first quarter of 2021, VFF’s share price hasn’t really risen yet. Currently, VAW’s share of the market is still falling. But let’s hope that at a time when progress is increasingly taking hold of the industry, this will provide a much-needed boost.
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is one of the leading real estate companies in the cannabis industry. Last week, the company announced its results for the first quarter of 2021. Highlights include the company’s total revenue of approximately $42.9 million for the quarter. This is a 103% increase from the first quarter of 2020. In addition, on April 15, 2021, the Company paid a quarterly dividend of $1.32 per share to holders of common stock outstanding on April 31, 2021. March 2021 are included. This resulted in a 32% increase in the dividend compared to the first quarter of 2020. The balance sheet of the company as at 31… March 2021 includes approximately $122.1 million of cash and cash equivalents. Added to this is approximately $539.3 million in short-term investments out of a total of approximately $661.4 million. In addition, the company completed four real estate acquisitions in California, Florida, Michigan and Texas in the first quarter. In addition, three leases were amended to provide additional improvements to the tenants. These improvements include properties in Michigan, New York and Pennsylvania. Still, it initially looked like IIPR’s action would be a 5-7. Could sustain a better trade, but fell off soon after. Given the way marijuana stocks have performed in recent months, shareholders are increasingly concerned about the timing of consistent upside transactions.A number of companies, like GW Pharmaceuticals and GW Pharmaceuticals, have found a method to extract the active ingredient from marijuana and turn it into a medicinal drug. These companies have gone on a buying spree to increase their share of the pot industry, and they have their eyes set on taking over the pharmaceutical market, including the prescription drug market. Some experts believe that this trend is resulting in an increase in the price of marijuana stocks. So, will marijuana stocks be impacted by inflation? Marijuana stocks are currently trading at a level that is above their historical average, but not quite to the point where it would be considered a bubble.. Read more about cann stock forecast 2021 and let us know what you think.
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