Why Are Pot Stocks Popping?
October has been a good month for the marijuana industry, with the Horizons Marijuana Life Sciences ETF up about 13% so far against the S&P 500‘s 4% climb. Many pot stocks, including Canopy Growth (NYSE: CGC) and Curaleaf Holdings (OTC: CURLF), spiked to levels they haven’t reached in months. It’s not often that there’s such widespread bullishness in the industry.
However, pot stocks are generally volatile, so it’s important to understand what’s gotten investors so excited recently before making an investment decision. Below, I’ll take a look at what’s behind this latest rally, what it means for investors, and whether now is a good time to buy pot stocks.
The clear catalyst behind the rising value of cannabis investments this month was the vice presidential debate that took place on Oct. 7. The Horizons ETF jumped 7.3% the following day, from $4.51 to $4.84. And by Oct. 13 it hit a high of $5.05 — up a total of 12% within a week’s time. What got investors’ attention amid the debate was that Sen. Kamala Harris, the Democratic vice-presidential nominee, vowed to decriminalize marijuana if people voted her ticket into power next month.