Business is a-booming in the cannabusiness right now, but when it comes to the stock market, it’s still working out some kinks. Marijuana stocks have crashed and burned after hitting an all time high. The stocks for marijuana were always high risk and dodgy for many investors as they are an OTC, or over the counter market. That isn’t the reason why it crashed and burned howeve. There are many companies that do trade in OTC and they have been very successful from it. Some examples include Nestle and Samsung. When marijuana sales started to go through the roof after legalisztion took effect, something dangerous happened. Medical marijuana stocks burst onto the trade scene despite the warnings from many financial advisors.
The SEC put a halt on marijuana stocks while they started to investigate security fraud in the industry. Although they didn’t find anything, the shares have never recovered. Marijuana stocks have imploded and companies such as Medical Marijuana Inc and Cannabis Science Inc have lost around 75% since their peak last year and Growlife Inc lost 96% after market capitalisation.
Surely if marijuana is ever legalized at a federal level, there will be plenty of good investments available and equity banks are already starting to release their top favourite names. In the mean time however, trading on the OTC stock market with marijuana certainly isn’t the way to go and it remains to be a terrible way to bet on the outcome.
The stock market is unpredictable as it is, and with the recent boom many people thought that it was a great time to invest. Now however it has crashed, burned and gone up in smoke and plenty of companies have lost a lot of money as a result.