Marijuana stocks soar and cannabis industry ready for "tons of growth"

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The publicly traded cannabis companies have announced strong sales since the legalization of the pot by Canada last October and several US states have voted in favor of the recreational and medical use of marijuana.

The owner of Corona Constellation Brands (STZ) Holds more than 35% of the capital of Canopy Growth (GSC), a Canadian cannabis company that is considering taking a bigger step in the US with the purchase of the American cannabis company Acreage Holdings. Constellation also announced Thursday that it could eventually increase its stake in Canopy to 50%.

Bubble or good deal?

"This business is still in its infancy. It's like investing in alcohol after the ban. There will be tons of growth, "said Dan Ahrens, chief operating officer of AdvisorShares Investment Company. "But there will be circuits at home and there will be a lot of withdrawals on hold."

Ahrens believes that investors must be patient and selective. But he believes that they will be rewarded – that is, they end up picking the winners.

"These are new businesses in the making. There will be volatility, so you have to be selective, "said Ahrens, adding that he favored companies that had not yet progressed because they had entered into large contracts like Canopy and Cronos.

Rob Almeida, global investment strategist at MFS Investment Management, said investors could get ahead of themselves. He fears that cannabis stocks will become a mode of investment like 3D printing companies and block chains.

"Cannabis is not going to have a parabolic growth," Almeida told CNN Business. "There is a lot of hope and excitement."

Cannabis prices are down

A concern: Now that more and more states are legalizing marijuana use, prices are falling as competition increases.

BDS Analytics, which calculates a consumer price index for the cannabis industry in the United States, recently announced that February's global prices for products such as ingestibles, topical creams, sprays and preformed pens February 2018. Prices decreased by almost 2% compared to the previous month.

Many publicly traded cannabis companies have also announced a drop in the retail price in Canada since legalization last October.

Aphria, for example, announced this week sales below expectations. Shares plunged nearly 15% on news. But the stock is still up more than 40% in 2019.

More offers probably on the way

Much of the enthusiasm relates to expectations of more mergers and partnerships. Aurora Cannabis (CBA), a Canadian company whose shares have jumped 80% this year, recently announced the appointment of Nelson Peltz, a legendary investor and trader, to the position of advisor.

This suggests that Peltz could help Aurora team up with a mainstream consumer or healthcare company. Tilray, for example, also has a strategic relationship with generic drug manufacturer Sandoz, a subsidiary of Novartis (NVS). Thus, other cannabis companies might consider teaming up with Big Pharma.

Canopy's plans to acquire Acreage could also lead to a new wave of consolidation.

Matt Hawkins, senior director of Cresco Capital Partners and investor in Acreage, said in an email to CNN Business: "This is the moment when the cannabis industry knew the situation was imminent: consolidation.

Hawkins added that this deal "will result in a wave of merging cannabis companies in order to compete with Canopy / Acreage" and that it "will be very difficult for start-ups to enter the industry and compete with conglomerates."

In other words, there is another sign that cannabis is legitimately going: It starts to work as any other major consumer sector.

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