- 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.
Share prices in the Horizons Marijuana Life Sciences Index ETF have slumped as companies’ revenues missed expectations. Cannabis producers, investors and analysts have blamed Canadian regulations that have slowed the opening of new retail outlets, strangled sales and imposed higher costs. “We would probably give the first year a C minus,” said Seaport Global analyst Brett Hundley, giving the industry performance a barely passing grade. The slow roll-out of stores “creates a real problem for Canadian licensed producers, because they’ve expanded rapidly with cultivation and production facilities and have nowhere to go,” he added. Lackluster results from cannabis producers “will continue and potentially worsen,” Hundley cautioned.
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. FILE PHOTO: A man walks past a sign outside the Natural Vibe store after legal recreational marijuana went on sale in St John's, Newfoundland and Labrador, Canada October 17, 2018. REUTERS/Chris Wattie
Just like with almost everything, once gov't gets involved it leads to lost revenue, increased costs, and inefficiencies and red tape that bogs down the system.
The Durban(red hair -early mature) pre roll ciggerette packs(people don't know how to present Durban) might help? Advertising 'stomach' weed(pink cookies) and using the sativa strains for appetite suppressant etc -advertising-that might help?
Decriminalize don’t legalize
Those damn trailer Park boys under cut everyone
Has the demand for pot gone up within the general population? No. Those who wanted the pot experience got it anyway no matter what the law was. Just because pot is now legal doesnt mean there would ever be an increase in demand.
Way too much hype, on all fronts.
you mean the gov is messing things up? who would of thought.
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mckym nobody can stop reggae...😂😂 tuchome kuruka😂😂
They need to expand delivery options.
Oh no, I still have faith in you, Canada.
i'm not disclosing my store, because it may be licensed, temporarily. $120/oz. but there are so many stores that were selling and they are waiting for their license. they have government signs in their windows.
Where’s Amazon?🚬
So the black market wins yet again?