These 2 Trends Will Define Cannabis Stocks in 2022 and Beyond | The Motley Fool

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To make money investing in marijuana businesses, you need to appreciate the industry trends and act accordingly.

As you can see, these five leading marijuana companies have experienced marked drops in their price-to-sales ratios over the last two years, bringing them closer to the market’s average P/S near 3.

Uncertainty over rising interest rates has been driving a general downturn in growth stocks, and cannabis stocks have been hit especially hard.

So investors now have an opportunity to buy quality cannabis cultivators at a relative bargain, and it’s unlikely that valuations will return to their prior heights anytime soon.

Remember, it’s entirely possible for businesses to grow themselves into an untenable position financially, especially when they’re massively expanding their cultivation and distribution facilities at the same time.

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