Canna Stocks- Challenges Holding
I never knew what the true challenges of investing in canna stocks would be until I had real money on the line.
When I first started investing the challenge was watching the value drop. I went through this with Canopy Growth near its IPO, watching my investment drop 50%.
The stock was dropping and I am losing money. Sounds like the worst case scenario.
But as time passed and the value went back up additional challenges appeared.
As the value of my original investment grew, I gained confidence in the sector and started buying various companies. I made purchases in mid 2016 of canna stocks like Aurora, Organigram and Aphria.
In November 2016 the task force report on legalizing canna came out. Just before this, canna stocks increased in value substantially.
You might be surprised to hear that the stocks going up was a big challenge for me. There were a few days where the majority of the stocks went up by 5-10% every day.
How can that be a challenge?
You start to wonder if you should be selling. How can stocks go up this much and stay up? How much further will they go? If I sell now will the stock go up another 10, 20, 50%?
This is a great problem to have compared to the stocks going down, but still really challenges you to think about your options. Do you sell some, all or none of the stocks, and hope they come back down.
Negative Articles About Canna Stocks
So I’m already stressed out about what to do with these damn investments and suddenly fake news starts reporting a bubble about to burst.
Many analysts have gone on BNN and said to steer clear of canna stocks. Who knows maybe they will be right eventually.
There were articles comparing canna stocks to the tech bubble. I had a hard time comparing the two as the tech stocks had much larger market caps and they didn’t actually produce a product. Canna stocks on the other hand were producing a real product.
Here’s a few examples of articles on the canna stock bubble.
So here I am holding a large amount of money in canna stocks, going exactly against what analysts are saying.
Even today there are still many articles pointing out all the issues with legalizing canna.
When the provinces premiers had a meeting they discussed the option of delaying legalization. Luckily Trudeau stood his ground and said they are sticking with July 2018.
Another string of negative articles was when a few producers were using unapproved pesticides.
With anything new, there is always questions or growing pains. As the Canadian canna industry is maturing it continues to go through hurdles along the way.
Some of these hurdles could spook a person into selling their stocks. I have also been learning along the way, helping me not get spooked.
Personally I have come to expect negative articles, the media wants news that gets people coming to their site. Seems like warning articles are the best way to do that.
Each hurdle Canada goes through, adds more value to our industry. Canadian companies are learning a lot as the industry matures making it more likely they can expand internationally with intellectual property.
These challenges can lead to opportunity, if you can overcome them and others can’t.
The challenge of price increases no longer bothers me, as I have decided to invest long term. If at some point my investments go up enough that I don’t think its sustainable I may sell. I hope I end up with this challenge again.