Kleiman, professor of public policy at the University of Southern California at Los Angeles, has said he doesn’t “see how there’s money to be made producing an agricultural commodity,” because once the market becomes competitive, prices will fall.
He might be right, and many investors are finding it hard to weed out the good companies from the garbage ones. CannaVest, which specializes in industrial hemp production, had climbed to $201 a share last month. It closed up 11% to $68.10 Friday, but it’s lost nearly two-thirds of its market value.
Nonetheless, millions of investors and dollars have flowed into burgeoning companies on all corners of the marijuana industry. Back in January 2014, marijuana industry stocks surged anywhere from 20 to 1,700 percent. Marijuana sales reportedly averaged nearly $1 million per day in the first five days of legalization in Colorado. Policymakers expect sales in 2014 to top $600 million and the market in Washington state is projected to be at least as large. Studies predict a $10 billion market in the U.S. by 2018.