The dotcom bubble burst due to various factors, including speculative or trend-based investment, zealous funding from venture capital firms for startups, and the inability to generate profits.
If you are concerned over the viability of the cannabis industry, join us at the Benzinga Cannabis Capital Conference, the world's largest gathering of cannabis decision-makers, founders, investors, and advocates which returns to Miami Beach, Florida on April 11-12, 2023.
Are Cannabis Startups In The Eye Of The Storm?
Similar to the tech industry in the 1990s, the cannabis industry is currently experiencing a surge of excitement and investment due to its relative newness and legalization for recreational use in the U.S. and Canada.
However, due to the federal illegality of cannabis and lack of access to institutional funding, retail investments are surging.
- Pay attention to red flags and diversify your investments to reduce risk.
- If the story is too good to be true, it is probably not good.
- If an investment opportunity is advertised as unique and perfect, check the company balance sheet and try to meet with management.
- Don't invest based on hype; Look at the fundamentals of a business.
- Watch out for sudden increases in stock prices.
- Always check cash flows to make sure you are not sinking with a speculative move.
- If you want to invest in cannabis stocks, multiple different types are available, and how you'll invest may vary depending on the exchange that your investment of choice trades on.
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Want To Know More?
- Join us at the Benzinga Cannabis Capital Conference on April 11-12. This is the place where DEALS GET DONE, where money is raised, M&A conversations start, and companies meet investors and key partners. Don’t miss out. Secure your tickets now before prices go up.
The cannabis industry can learn from the dot-com bubble by staying on brand, being reasonable in assumptions and projections, and avoiding overzealous marketing spend. Despite current market fluctuations, the long-term value of the cannabis industry is positive and yet to be fully recognized.
Image Credits: Ilona Szentivanyi By El Planteo
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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