Although many cannabis stocks retreated in the second half of this year, the surge in cannabis sales and increasing legalization efforts may lead these stocks to a strong rebound next year. So, if one believes cannabis will rebound in 2022, one should consider scooping up HEXO (NASDAQ:HEXO) and Neptune Wellness (NEPT), which are down more than 70% in price year-to-date. Read on.Cannabis stocks plunged in price in the second half this year as U.S. regulatory reform extended barriers to broad ownership of cannabis equities by institutional investment managers. However, most Americans support the legalization of cannabis. Also, the U.S. cannabis industry is growing at an unprecedented pace, and cannabis sales are estimated to increase 41% year-over-year to $31 billion at the close of 2021.
San Francisco supervisor Rafael Mandelman said that "Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers." Moreover, the San Francisco Board of Supervisors passed an ordinance to suspend the Cannabis Business Tax for the 2021 and 2022 tax years. This should give the legal cannabis businesses a boost.
Given this backdrop, we think it could be wise to bet on cannabis stocks HEXO Corp. (HEXO) and Neptune Wellness Solutions Inc. (NASDAQ:NEPT), which are down more than 70% in price year-to-date but possess a solid rebound potential.