Shocks to the legal marijuana and hemp industry, as you have come to know by now, is what I refer to as Ecoforming and over time these shocks transform the industry much the same as how a vibrant ecosystem evolves over time. However, sometimes an event may occur from outside of the industry that sends shockwaves through it. As an analogy, just ask the Dinosaurs (oh right, you cannot)! Today, it could be an act of terror, sudden unexpected economic news (inflation on the rise, higher or lower than expected unemployment, etc), war (or the threat of it), and so forth. What if the Federal government issued, without any advanced warning, an Executive Order that reclassified marijuana to a legal substance? What if instead it decided to ignore individual State legislation and court rulings and crack down despite the fact that the Judiciary branch has a budget of $0 to investigate, charge, and prosecute lawful persons and businesses operating in full compliance with State law?
Over a year ago, I wrote on β and I repeated a portion of that in this month’s Canadian edition of CannaInvestor Magazine.
Based on the snapshot above, it appears that there is not a strong correlation between the MJ indexes and the Dow Jones Industrial average – even more so for the Canadian index. Therefore, for those that have not yet invested in the shares of publicly traded cannabis companies, now may be the ideal time as investing in this industry just may be a way to mitigate risk. A three-day snap shot is just that; however, I hypothesize that the legal marijuana and hemp industry just may be recession proof. For our purposes, the term “cannabis industry” refers to marijuana and hemp.
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