This translation has been automatically generated and has not been verified for accuracy.Wall Street’s love of cannabis appears to be going up in smoke as vaping-related ailments and missed revenue projections are prompting short sellers to raise their bets against the industry, fund managers and analysts said on Wednesday.
More than 800 cases of a vaping-related lung disease and 12 deaths across 10 U.S. states have so far been reported by the U.S. Centers for Disease Control and Prevention, leading states such as Massachusetts to impose temporary bans on all vaping products. Those numbers are expected to climb.
“We’ve been through the golden ages in the sector where you had high growth models and unsustainable price speculation because it was a hot new idea,” said Michael Underhill, chief investment officer at Capital Innovations, who has focused on cannabis stocks. “Now the gold rush talk is gone and you’re going to see a rationalization of the business.”
“It’s going to be a while before big institutional investors can access the cannabis space and that takes away the incremental buyer that could push stock values up,” he said.That lack of support from capital markets will also weigh on companies trying to expand in newly opened markets such as Illinois and Massachusetts, making it harder for those with weak balance sheets to survive, he said.
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