Cannabis companies are having a horrible summer as scandals mount and stocks slide

The cannabis sector has hit a summer slump, weighed down by a series of scandals, regulatory deadlock and a growing sense that the industry is not delivering the gold rush-like returns that some investors were expecting.

The firing of Linton, viewed by many as the face of legal cannabis given his high profile and frequent media appearances, was a shock for many and a sign that the industry’s freewheeling ways may be over. Linton himself acknowledged to MarketWatch that the $4 billion investment that he and co-CEO Mark Zekulin accepted from Corona beer distributor Constellation Brands Inc. STZ, -1.03% late last year had contributed to their downfall.

DiPisa said the move is a signal to the sector that institutional money and an institutional mindset has moved in. “Linton is what cannabis should be,” he said. “Now we’re seeing the big boys and the big dollars want money from their investment, which makes sense, but it feels as if some of the romance and passion is gone.”

The FDA has told companies that they cannot add CBD to food or beverages until it devises a set of rules, although it appears willing to tolerate it in topical products — as long as companies don’t make serious health claims.Analysts said Curaleaf was asking for trouble, given its aggressive push into the space via a partnership with drugstore chain CVS CVS, -0.88% which has pulled the products named in the FDA letter.

“I thought the banking issue would be the easiest to pass, but what surprised me most about the hearing was how few Republicans and Democrats showed up,” said DiPisa. “Whether you are pro-cannabis or not, banking is such a fundamental part of any business, it’s crazy that they won’t even show up. There’s no other industry in the U.S. that has this issue.”

So why exactly are Barr and Mc Connell in this story photo?

Patience

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