Guessing morningstar seeing big things coming with cannabis...

Guessing morningstar seeing big things coming with cannabis stocks

Cannabis stocks have been on a rollercoaster the past few years, acknowledges sector director Kris Inton. We nevertheless expect to see a good deal of change in cannabis consumption in the coming decade, which will drive growth. Right now, the legal U.S. market is estimated at more than $US10 billion; by 2030, we forecast that figure to balloon to more than $US80 billion, he reports.Where will that growth come from? Additional states will likely legalize tetrahydrocannabinol, or THC, cannabis—and the pandemic may only accelerate that, as states look for new tax dollars to plug budget gaps, says Inton. We also think users from the black market will migrate to the regulated, legal market, and that some non-users may become consumers upon legality.“The legal market is set for massive growth benefiting all cannabis producers,” concludes Inton.Several of the cannabis producers we cover are undervalued today, although they carry no moat and an uncertainty rating of Very High or Extreme.