The Rise of Cannabis Shares
Medical cannabis shares enjoyed a week of spectacular gains as so-called pot stocks have suddenly come back into fashion. It seems investors have turned their focus to this sector after some recent developments both in the UK and the US.
This Tuesday, London IPO’d its first-ever medical cannabis company, MGC Pharma. On its debut, the company’s stock more than tripled. The price shot up to 4.25p from an open price of 1.475p. It successfully raised 6.5 million pounds with a market cap of 75 million thanks to its blockbuster first day at the stock exchange.
Cannabis stocks in America
The trading frenzy in pot stocks continued in the American stock exchanges as Tilray shot up by 50% adding 2 billion dollars to its market cap within a day. The stock is up 670% this year. Similarly, Canopy Growth is up 110% YTD while Aurora Cannabis, another popular pot stock among American retail investors, is up 120% this year. Aphria is up a massive 280% already.
In the US, 30 states have already legalized medical cannabis. According to research by Prohibition Partners, the market is expected to grow to $37.9 billion by 2024. The same research also expects the medical cannabis market to be worth 2.3 billion pounds by 2024 with over 340,000 patients using the facility by that year.
Growing interest in Britain
This is not the first time pot stocks in the US have received a lot of attention. Britain has been missing out on this sector because of its reluctance to allow these companies into the country. Many have compared it to legalizing the drug business, but medical cannabis is helpful in pain management and its use is increasing day by day. Today, attitudes in Britain towards the sector are changing. And with the IPO of MGC Pharma, the floodgates might soon open.
CEO of Memery Crystal, Nick Davis, has been an advocate of medical cannabis use and believes the time is ripe for more companies to go public. He has said that after the successful IPO of MGC Pharma, global companies have approached him for listing on the UK market. Companies from America, Israel, and Canada have also approached him. While general public acceptance of medical cannabis is still in its early stages, prospects are looking up.
Without doubt, demand for medical cannabis is surging across the US and Europe. The sector is bound to be one of the highest growing sectors of this decade. While advocates for medical cannabis have an uphill battle ahead of them in terms of legalization, the future does appear bright.
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