A combination of factors is coming together for a big run in marijuana stocks in 2019.
They don’t get much better (or more lucrative) than this.
If you’re watching marijuana stocks and the marijuana industry, you’re seeing it come together in real time.
You see the wide and growing divergence between marijuana stocks and the legal marijuana industry.
Every day there is some great news on the fundamental side of the industry.
For example, Massachusetts recreational use legalization went into effect last week.
The numbers are great.
Even though there are only two licensed stores in the state (and both located in rural towns and nowhere near the state’s population center of Boston metro area), sales are soaring.
Those two stores generated sales of $440,000 of sales in the first day.
Five days later the trend is just as strong. Total sales have reached $2.2 million according to NBC Boston.
The demand is remarkable, unrelenting, and, best of all, completely consistent with every other jurisdiction which has legalized marijuana.
This is the kind of strength which led the Seed Investor to forecast that Massachusetts is on its way to being a $2 billion legal marijuana market.
All the fundamentals of the industry are great and getting better by the day.
However, the same is not true for marijuana stocks.
They have been sliding steadily since mid-October when Canada fully legalized marijuana.
And with no obvious and immediate catalysts for a turnaround, the marijuana sector may tread water for a while and the longer they do so, the better.
Historically, divergences like the one you’re seeing between marijuana stocks and the fundamentals of the industry don’t last forever.
As long as the industry continues to grow like it is, the stocks will catch back up…eventually.
And when marijuana stocks do catch up, they tend to catch up in a hurry.
In the meantime, keep an eye on both the stocks and the industry because the longer and deeper the gulf between the two becomes, the greater the rally will be when it closes.
Although that doesn’t seem good now, everything is coming together to have one of the biggest years ever for marijuana stocks in 2019.