People are not investing on legal weed companies because they are making a lot of money, I think people are investing because there is a big high potential in the future of it.
Today it may not worth this much, maybe today it is overvalued a lot, however they believe that the first weed companies that are getting bigger each day can worth A LOT in the future, 10 years from now these companies will worth insane amounts and they are investing into that potential and not today's prices. I am not invested in them but if I ever did I would definitely invest for what it could be and not for what it is right now.
it's a real tossup at this point though, which is why the risk/reward on pot stocks is so high right now. it's super speculative, and the situation is so nascent that market share can change very quickly.
in a few years, we'll have a much clearer idea of who the dominant players in the industry are. investment will gravitate towards them, and the potential gains will get smaller over time.
The problem with these emerging stocks is that they are very difficult to price properly, because it's not just a matter of looking at the fundamentals and whatnot, but also the fact that in most cases 50% of their value is based on nothing but speculation, especially when you have retail investors jump on board like there is no tomorrow.
yeah, and i'd actually say more than 50% is speculation.
it's really difficult to say exactly how big the market will eventually be, or what the regulatory landscape will look like if/when the federal government establishes a regulatory regime. and it's becoming a highly competitive market for producers. i suspect most companies are overestimating the percentage of the market they can capture.