Why Cannabis Is More Important Than Crypto Right Now
For many, today is an ordinary day. But for many investors, weed advocates, and entrepreneurs, October 17th, 2018 marks Canada’s action to fully legalize Canadian cannabis companies.
Canada is the first country to ever do this, giving Canada and it’s companies “first-mover advantage.” A pretty good position as more research is flooding in about cannabis use helping many people and other countries having yet to implement their own cannabis legalization system.
With this sort of news, it’s no surprise that Canadian cannabis stocks are doing pretty well. Stocks from Canopy Growth, Aphria, Aurora Cannabis and others are growing and have been over the past few years.
In fact, when you look at those “Big Three” companies, their stocks are behaving almost like another asset that has made a splash in the market.
However, it seems weed is gaining far more traction than what Bitcoin could even muster and here’s why.
Numbers Don’t Lie
Both cannabis and crypto have kind of similar trends when you look at them. For Bitcoin (created in 2009), it’s been up 7,000% up until 2017 with people experiencing another massive spike right on the turn 0f 2018. This isn’t just with Bitcoin though. Looking back to 2017 a company called Ripple saw a growth of up to 10,000% in the span of that year!
Similarly looking at those three cannabis companies you’d notice that those companies had experienced growth of over 1,000% on average since 2014. One growth that was particularly surprising was Aurora who has grown up 21,800% since 2014!
But why exactly is that?
Because both subcultures have similar ties. They’ve both faced regulatory changes, and both have similar cultures.
They have raving fanbases and supporters with investors making big money through crypto and customers reporting amazing effects from their pot use.
But the reasons why cannabis will outshine cryptocurrency, in the end, is due to many things.
The first is the numbers.
They aren’t lying when you look at them. At the time of writing this, Bitcoin is worth of $8,349.39 CDN right now. And while that’s certainly a strong number, it’s a far cry from the $16,925.43 CDN worth it had starting this year.
Similarly, Aphria is worth $18.69. Not as much as Bitcoin by any stretch, but the company’s stock price was $20.19 at the beginning of the year.
A weed company didn’t just lose half of its value in the span of three quarters.
The numbers also tell us far more of the nature behind crypto, and why it’s so easily forgotten.
The Volatility And News
Any person investing in stocks knows that stock prices are based on peoples reactions to the news. Stocks are a money game, but also a mind game.
It’s basic supply and demand much like anything. But we business stocks don’t react the same way as crypto does.
Crypto is a wildcard. I like to describe cryptocurrencies as more than just a stock. It’s both a stock AND a currency. This means it’s not only based on the supply and demand — and competition — like a stock. It’s also based on the value the exchanges base it on.
But that’s only the beginning. Because with crypto, it’s got its own governance and also has to deal with legal issues as well.
We see this all the time where prices skyrocket upon hearing companies or governments becoming more accepting of crypto and even using it.
Furthermore, the volatility can also stem from that internal governance system. Crypto doesn’t have a central authority managing it. It relies on the collective whole. It’s what keeps the system secure, but also the prices fluctuating as each member sees crypto and the other smaller parts differently.
In the beginning, this wasn’t a big issue. But now with exchanges and a slow acceptance, these issues are bubbling to the surface.
The Acceptance/Awareness Of It
But another big factor is the overall acceptance and awareness of both crypto and weed. Weed is flourishing because there are many advocates out there. There have been rallies and a massive push for legalization.
You can also look back in history. Why was cannabis illegal in the first place?
Cannabis was first criminalized by Canada in 1923, almost 100 years ago. The US didn’t pass that law until 14 years later in while they suffered through the Great Depression.
The US’s reasonings had some racial undertones, however, for Canada, historians pointed at the lack of knowledge. When cannabis was added to a 1923 schedule banning certain drugs, this addition wasn’t challenged. Furthermore, there were no police seizures of marijuana until 1932 not to mention that when the schedule was passed in 1923, no newspaper at the time reported that weed was illegal.
We can see this in crypto as well. I recall Gary Vee speaking at a conference around cryptocurrency and said one thing that stuck with me.
“If you go out after this conference and start talking to people on the street about cryptocurrency or blockchain, 99.99% of those people are not going to know what the fuck you are talking about.”
And he’s right.
If you tell people to list off how many cryptocurrencies they know they’ll probably tell you Bitcoin and that’s it.
There are well over 1,000 cryptocurrencies in existence with several more being made.
Not that many people are aware of it existing while cannabis has been a real thing for people. There were more police seizures of marijuana before we had rallies and a push for legalization. Not to mention people rallying around those success stories.
It begs the question what has crypto done for the world or for people?
It’s made a handful of people starting living a lavish lifestyle.
That’s not a bad thing.
But compare that to cannabis, there is no short supply of powerful stories. War veterans doing community service, loved ones who were vegetables getting up and moving again, people saying that they can think and move better than they ever could in years. Those stories are common throughout the world.
We don’t hear of police raids hijacking peoples superpowered computers to mine bitcoins.
We don’t hear of large cities or many stores accepting bitcoin or other coins.
But we do hear about weed rallies and protests.
We do hear stories of peoples lives changing due to cannabis use.
And thus the broad acceptance of this substance has spread.
Cryptocurrency Is Unknown
Crypto is still some foreign thing that people don’t know about. The stories may be lifechanging and big but aren’t served to the mass public. There have only been a handful of small towns that have been able to adopt cryptocurrency and actually use it.
Until we see crypto actually stabilizing much larger cities, it’s easy to dismiss crypto as another fad.
Furthermore, with the volatility, those who are aware of crypto existing may be staying away for various reasons.
From pump-and-dump schemes (which the stock market has banned a long time ago) to the absurdity of price fluctuations (see Dogecoin, the coin made to prove how absurd the crypto market is), people have a laundry list of reasons why crypto isn’t worth their time.
And sure, crypto can make you a mega-millionaire some day.
But now, so can weed.