The 2020 pandemic hit many companies hard, while other companies took it as a chance to grow, seemingly unaffected by the state of the world around them. NVIDIA (NASDAQ:NVDA) came out as one of those thriving businesses and achieved gains of 122% in 2020. The company’s graphics processing units (GPUs) were present and needed for trends that accelerated exponentially due to the pandemic, boost...
A couple of months ago, U.S. President Joe Biden won the election, opening a pathway towards new reforms. Since then, voters passed a couple of marijuana reforms in November, and investors are watching the cannabis industry with great interest.
Many predict that the legalization of marijuana in the U.S. might be closer than we think. Cannabis companies, Aphria (NASDAQ: APHA) and Tilray (NASDAQ: TLRY) are getting ready for a successful merging that may come in the near future.
Is this optimism well-founded, or is it going to take longer than predicted?
While Biden’s posture on decriminalization when getting caught with marijuana looks promising, he didn’t campaign on a full legalization policy.
However, one crucial thing to consider is the COVID-19 pandemic. It will cost the U.S. trillions of dollars to stop the recession, and many of its citizens were left without a job.
One of Biden’s top priorities is to create new jobs. The possibility of generating some of them through the cannabis industry could be tantalizing enough for him to take a closer look into legalization.
There are currently more than 320,000 full-time workers in the legalized cannabis market, with 77,000 of them being created in 2020 alone.
At this point, many would argue that it is a question of “when will it be legalized” rather than “will it be legalized.” Aphria CEO Irwin Simon mentioned that the marijuana market would be “fully legalized” within three years at the latest when being interviewed on CNBC.
Others expect the cannabis industry to be legalized within the year. Canopy Growth (NASDAQ: CHC) CEO David Klein claims that they have everything set and will probably operate on U.S. ground within the next 12 months.
There is still a lot of uncertainty behind the expectations.
While keeping these companies on the radar is the right move, it is within an investor’s best interests to take all of the expectations with a grain of salt. There is still a lot of uncertainty as to what will happen in the U.S.
Keeping in mind that these claims are just expectations and bold predictions is the safest call. There is really no guarantee that marijuana will be legalized during President Joe Biden’s term or the legalization policies will not meet expectations.
The U.S. has already taken a first step that positively impacts the industry: Decreminilazation. However, this doesn’t do much for Canadian-based cannabis stocks looking to access the American market.
Should I Buy?
As previously mentioned, Aphria and Tilray are getting ready for their merger, which is bound to happen during the second quarter of the year. With this, they’ll have sufficient power to reach deep within the U.S. market (once it becomes legal, of course)
The marijuana industry is highly fluctuating, and one can only predict what will happen after legalization. Take everything with a grain of salt. If you think that these companies are a valuable investment today without taking U.S. legalization into account, then, by all means, buy these stocks. If you care how long Congress takes to legalize cannabis, then waiting for an update on the matter might be a better move and ensure your expectations are at least beginning to be met.
Zoom’s Potential for Long Term Investors
The 2020 pandemic had investors on edge with unpredictable fluctuations in the market. Some stocks bound for great success plummeted, while others doubled or even tripled their price in a few weeks.
One of these stocks belongs to Zoom (NASDAQ: ZM), which has increased more than 220% ever since businesses, schools, and families began to rely on its online call services. There is no question that the pandemic triggered zoom’s lightning-fast growth. In the third quarter of Zoom’s fiscal 2021, the company’s net income rose by a whopping 9,000%!
Will this trend continue? Will the stock get stuck and stabilize? Will it hinder in the wake of other platforms offering the same services?
Let’s talk about that.
Will Zoom stagnate and plummet?
Highly unlikely. While it is uncertain whether Zoom will produce the same amount of spontaneous revenue for investors ever again in years to come, the need for online connectivity has been created. Zoom can satisfy this, which makes it an excellent bet for the long run (more on that below). That necessity is not going anywhere. Working from a distance for specific jobs and new tendencies on how people communicate are still evolving.
Why Zoom can mean wins for long-term investors.
With a post-pandemic world around the corner, Zoom will have to strategize ways to optimize its platform even further to fulfill its users’ ever-changing demands. They will have to adapt to companies transitioning back into office operations while still taking into account the growing amount of distance workers.
Zoom’s usefulness will continue to remain relevant. It will continue to be a digital tool. Businesses, families, schools and friends will stay connected even after the pandemic. Investors who buy Zoom may not experience the same returns the stock allowed in 2020 right away. However, long-term shareholders will definitely grow their portfolios substantially over the years to come.