Cheap Cannabis Stocks Are Driving M&A Activity – Cabot Wealth Network
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Daily Stock News Cannabis Stocks
Cheap Cannabis Stocks Are Driving M&A Activity
Cannabis stocks have become so cheap that M&A activity is now underway. Investors should stick with the financially sound players to benefit.
December 11, 2024•
Michael Brush
•
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May the buyouts begin. Poor sentiment has pushed the values of cannabis companies so low, the strong are now buying the weak. Like the recent cannabis company insider buying, this is a signal that valuations may be close to bottoming here. However, realistically, it could be a while before the sector recovers since we are dependent on politicians for progress. The bottom line: You want to emphasize owning the financially strongest companies now, for two reasons.2 Reasons to Own Financially Strong Cannabis Companies 1. Financially sound cannabis companies are the ones that can power through without having to do onerously dilutive financings at low stock valuations or high interest rates. The challenge here for the weak is that politicians hold the keys to all the important potential industry reforms: rescheduling, banking reform, and decriminalization or even legalization. And politicians are slow to act. The good news is that cannabis reform does seem inevitable. There is strong cultural momentum towards cannabis reform because of popular support for this change. A majority of Americans favor cannabis reform and legalization even on both sides of the aisle. This suggests that sooner or later politicians will respond and make favorable changes. President-elect Donald Trump campaigned in support of all three of the key reforms. He likes to say, “Promises made, promises kept.” It’s showtime. I think reform will happen. But it is going to take a while. [
