As 'Cannabis 2.0' kicks off in Canada, industry strangled by limited retail outlets

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A year after Canada legalized use of recreational marijuana cannabis stocks have lost half their market value, and investors betting that the ...

REUTERS: A year after Canada legalized use of recreational marijuana cannabis stocks have lost half their market value, and investors betting that the launch of higher-margin pot-infused drinks and other products will quickly lift shares may be in for a bumpy ride.

About half that number currently exist, with about 300 of those stores in Alberta, which has looser regulations than the rest of the country, while the most populous provinces of Ontario and Quebec have lagged far behind. With each province responsible for its own retail rules and taxes, the fragmented approach to regulating the industry will continue to raise costs and create distortions in the market, Greer said.One such distortion is evident in prices, with consumer paying far higher prices for legal weed, according to industry experts.

"Now, this year these companies are coming more under the microscope by investors and people are saying, 'hey, when are you going to start making money?'" said Andrew Kessner, analyst at William O'Neill & Co.

 

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