Is There Enough Growth in Medical Marijuana Stocks?
The medical market for pot could become a casualty of the growing movement to legalize recreational marijuana. With legalized recreational products commanding higher prices, the supply of medical marijuana could take a hit – and that could be bad news for investors banking on the segment's growth.
According to data from research company BDS Analytics, much of the industry's long-term growth in the U.S. will come from the adult-use market. By 2024, BDS is projecting sales in that segment to reach $21.1 billion, nearly 200% higher than this year's expected sales of $7.3 billion. By comparison, the medical market will climb to just $9 billion in sales by 2024, a much more modest 64% growth from the $5.5 billion that the segment will do this year.
While that's still a good rate of growth for the medical market, the disparity is quite noticeable. In 2019, the recreational market will account for an estimated 57% of the total market, and that ratio will rise to 70% by 2024. With significantly more growth coming from the recreational market, investors might begin second-guessing whether medical marijuana is a good long-term investment.
Source Fool.com
