Could Volatility In Cannabis Stocks Be Following The Crypto Trajectory?

Welcome to July. Investors in the cannabis sector undoubtedly were more than happy to flip the page on the calendar to begin a new month and get on with the second half of the year as they attempt to put the last quarter behind them.

The so-called ‘pot stocks’—which saw some major spikes earlier this year—were among the worst performers in the last quarter on both the American and Canadian exchanges as the sector limped along, dealing with everything from worse-than-expected earnings to continuing supply issues. But could the trend be nothing more than the inevitable growing pains of an emerging sector that is destined to disrupt well-established industries?

Investors who got into the cannabis sector looking for rapid accelerated growth could compare their experience to those who jumped on to the cryptocurrency roller coaster. That asset class, which is experiencing renewed interest of late after prices resumed their upward trend, is seeing some serious volatility as well.

Established, Growing Market

But there is a big difference between the two sectors: the ultimate timeline. The cannabis market already has an established customer base that is poised to expand—and possibly explode—with the next phase of legalization of edibles in Canada and the eventual legalization of recreational weed use in the U.S.

Despite the drops in the last three months, most major cannabis stocks continue to perform well on a year-to-date basis, however. For those who have been watching from the sidelines, this lull might be exactly what they have been waiting for to jump in.

Q2’s Worst Performers

Of the biggest cannabis players, the worst performer during the second quarter of 2019 was CannTrust Holdings Inc (TSX:), (NYSE:), which lost just over 36.5% in the U.S. in the three-month period that ended June 30, and just over 37.5% in Canada.

On the New York Stock Exchange, the Ontario-based medical marijuana producer lost almost US$3 a share in the last three months,…

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