Could the Cannabis Industry be the New Cryptocurrency

Could the Cannabis Industry be the New Cryptocurrency

Investors are always looking for the best return on their investment. In 2017 and 2018, many made a tremendous amount of money in Bitcoin and other Cryptocurrency as people diverted their cash which could not be tracked or regulated by the government in most countries. However, as the governments in many countries like India, are trying to control investment in Bitcoin and other cryptocurrencies to ensure that investors pay taxes. The returns on cryptocurrency are likely to reduce in the long term, and investors in Sweden and elsewhere are looking for other options like the Cannabis Industry to get excellent returns on their investment.

The increased investor interest in cannabis companies noted in January 2018 in Sweden, where the interest in Canadian cannabis shares significantly increased. According to Joakim Bornold, who works as a savings adviser for the customers of Nordnet bank, two Canada based cannabis companies Aurora Cannabis and Canopy Growth are among the top ten traded shares in the Swedish stock exchange Nordnet based on data available. Usually, only well-established brands and companies like Ericsson, Nordea Bank, Investor, Hennes & Maritz are the top traded shares in the Swedish stock exchange, indicating that many investors are betting on the cannabis companies.

Swedish investors are known to follow and invest in the new trends, and technologies like companies dealing with biometric sensors, 3D printing, Bitcoin and cannabis, an intoxicant made from green leaves of the marijuana plant is the latest investing fad in the country. A few decades ago, in most countries cannabis was banned, however many states in the United States have legalised the use of marijuana for medical purposes, and Canada is also expected to sanction the use of cannabis later in 2018. Investors hope the legalisation of cannabis to lead to an increase in demand for marijuana and the rapid growth of these cannabis companies.

Like Bitcoin and other cryptocurrencies which can be farmed, cannabis can also be grown in farms. Initially, only the flowers of the cannabis plant will be legalised, and later other parts of the cannabis plant are likely to be regularised. Many large pharmaceutical and tobacco firms have also invested in the cannabis sector.The increased demand for cannabis shares has also led to the increase in share prices for companies which supply equipment and other items for growing cannabis. For example, a company specialising in high tech lighting systems for cannabis plants, Heliospectra AB, which traded in Sweden's market for smaller companies saw its share price increase by over 130 % in the first two weeks of January 2018.

Bornold claims that the share prices of Heliospectra have increased because Swedish investors believe that the companies dealing with equipment and other cannabis growing supplies are like the suppliers of tools to gold diggers and are more likely to make a profit. Though Sweden is unlikely to legalise cannabis for its citizens shortly, this has not affected the demand for the shares of Canadian cannabis companies among investors in Sweden. Though the cannabis companies are small, more than 50000 investors have traded in shares in these cannabis firms from Canada on Nordnet and Avanza according to Bornold.

Photo by Andre Francois on Unsplash