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Last year, I joined the Advisory Board of the National Institute for Cannabis Investors to offer my technical analysis and experience to traders and investors interested in breaking into this exciting new space.
Unfortunately, for many investors, that excitement has dimmed in recent months.
Anyone that has even had a passing interest in the cannabis industry knows what a tough time the last year has been.
To be more succinct, it's been a downright bloodbath.
While everyone has been so focused on the massive losses in the cannabis industry over the better part of the last year, what's getting lost in the hysteria is that there is light at the end of the tunnel.
What you have to keep in mind is that the entire cannabis industry is still very new, relatively speaking. Most new industries have gone through their fair share of growing pains before the major players emerged to make huge profits for not only themselves, but their shareholders as well.
In fact, the Harvard Business School did a fantastic study on this "life cycle" of industries, which it dubbed the consolidation curve. It outlines the four stages of consolidation that all industries go through once they are created or deregulated.
In phase 1, we see the early movers emerge and immediately begin to grab market share, followed by hundreds of smaller companies all vying for a piece of the pie. This is by far the most volatile phase of any industry's life cycle, where huge price swings can occur on even the smallest bit of triumph or adversity.
And unfortunately for investors that got into the cannabis space in early 2019, the price swings since around April have mostly been down.
The downturn cost executives their jobs, shareholders huge amounts of money, and thousands of employees their livelihoods as scores of companies were forced into layoffs or even went bust.
The disappointment in the industry, once heralded as "the next gold rush," is palpable. Just look at the majority of headlines on the subject. Most would have you avoiding cannabis investing like the plague.
But there is hope yet for the cannabis industry. Instead of wallowing in despair – as most news on the industry seems to these days – look instead to the future…
Cannabis' Promise of a Better Tomorrow
Enter phase 2.
During phase 2, the major players in the space start scaling operations, acquiring competitors, and growing their market share. Success at this stage of the game is what builds the giants of the industry.
With the opening phase of the consolidation curve coming to a close for the cannabis industry, the cream is being separated from the chaff, and the strongest players are emerging.
And for those looking to make a fortune on what could be an opportunity measured in the hundreds of billions of dollars, the time to strike is now. That's because there is currently a heap of premium pot stocks trading at a massive discount.
But it's not just about picking any old cannabis company and hoping for the best. There are specific traits, unique to this industry, that will separate the winners from the losers.
And working side by side with the National Institute for Cannabis Investors – made up of some of the foremost experts on the cannabis market – we'll show you the companies that are poised to flourish in this developing industry.
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About the Author
Nationally recognized technical trader. Background in engineering, system designs, and risk reduction. 26 years in the markets.