Companies in the U.S. can only sell in-state grown weed to some markets, making it difficult to mass produce
The stock market’s marijuana boom is over. And for the once high-flying cannabis industry, a euphoric dream of never-ending growth has turned into a survival nightmare as it navigates through the bust.
The comedown has been brutal, with the largest exchange-traded fund tracking the legal weed industry, the AdvisorShares Pure US Cannabis ETF, trading for around US$2.37, down 96 per cent from the closing high of US$55.05 it hit in February 2021. But the reason it happened is pretty simple.
The business kicked into gear in 2018 when Canada legalized marijuana for recreational use, with the United States expected to follow along shortly. Wall Street bankers assumed they were living through the end of America’s second Prohibition and they were determined to cash in.
But while a few dozen U.S. states legalized weed, the push for a national law largely stalled out. Now, some states, like Texas, are ready to ban all recreational weed products. And with President Donald Trump in the White House, the likelihood of America legalizing pot nationally anytime soon seems remote.
Read the full article at Financial Post
