1 Reason Cannabis Stocks Are Still Very Risky Buys
For all the challenges that marijuana stocks have faced in the past year, including a lack of profitability and analysts being bearish on the industry, there's been no shortage of investors who have been willing to buy shares of cannabis companies despite the risks involved. The biggest risk for any cannabis investor today centers around how sensitive the stocks are and how volatile they can be in response to new developments in the industry, or just analyst opinions. This volatility shouldn't be ignored, as investors could see their portfolios lose significant value in a short amount of time.
It's not uncommon to see big swings in price from one day to the next in pot stocks, even among some of the bigger names in the industry. Canopy Growth (NYSE: CGC) and Aurora Cannabis (NYSE: ACB) have taken their shareholders on a roller-coaster ride this past year, and that's been true for the industry as a whole. Unfortunately, for many investors, the ride has been headed in one direction: down. Aurora lost more than 60% of its value this year, while Canopy Growth declined a more modest 34% in 2019. The Horizons Marijuana Life Sciences ETF, which holds a broad collection of pot stocks, has fallen by 40%.
Source Fool.com