As one speculative frenzy fizzles, another arises from its ashes. Marijuana Inc. is making more headlines than Crypto Corp. as the stocks of companies linked to the cannabis craze get caught up in a mania that’s sent prices surging.
References to “cannabis” in news articles nearly doubled the amount mentioning “crypto” this week, according to data compiled by Bloomberg.
Peter Atwater, president of Financial Insyghts, said that Google Trends data shows the real surge in interest “is among the novice wanting to know how to buy” marijuana stocks.
But the route to riches for weed stocks is far from a straight-line higher, with their fair share of potholes along the way. On Wednesday alone, shares of Tilray Inc, the first marijuana stock to go public on the Nasdaq stock exchange, nearly doubled, were halted on numerous occasions, dipped into the red, and proceeded to spike 40% in the final 20 minutes of the session.
Even Bitcoin hasn’t been as volatile as Tilray currently is since January 2014.
The Motley Fool has already issued a warning, “marijuana stocks are probably going to fall victim to a longperpetuated trend in the stock market of overestimating the impact and/or profitability of a high-growth or game-changing new technology or product.” So don’t go potty about these stocks.
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