NIA has developed an internal database of every Canadian listed cannabis stock trading on either the TSX, TSX Venture, or CSE. At Monday's close of trading, Canadian cannabis companies had a combined market cap of $55.84 billion - a new all-time high! Amazingly, exactly one year ago on October 16, 2017, the combined market cap of Canadian cannabis companies was only $9.72 billion.
In just one year, the Canadian cannabis industry has increased 5.74X in value! Two weeks from today will be the one year anniversary of when Constellation invested $245 million into Canopy Growth (TSX: WEED) for an initial 9.99% stake in the company. Prior to the deal being announced on October 30, 2017, the industry had a combined market cap of only $9.26 billion. Over the following 10 weeks, the Canadian cannabis industry saw its combined market cap increase by 3.57X in value to an initial short-term peak of $33.03 billion!
When the total market cap of Canadian listed cannabis stocks set a new all-time high of $33.03 billion on January 9, 2018, the industry's valuation got too far ahead of its trendline. Over the following 8 trading days, cannabis stocks experienced a dramatic decline of 36% to a combined market cap of $21.11 billion.
Has the cannabis industry once again gotten too far ahead of its trendline? Probably, but as investors take profits on the biggest momentum plays that have seen valuations increase into the billions, they will look to reinvest a portion of their proceeds into companies that they believe will become the biggest cannabis plays of the future - companies that today are completely undiscovered as cannabis plays and are trading near 52-week lows with extremely low valuations that could quickly multiply just like the overall industry did over the past year.
Preparing Americans for Hyperinflation
