So much for the argument that if marijuana is legalized everybody will be smoking dope, sitting on their sofas and playing video games. Far from it. Demand for cannabis has been underwhelming, and investors are starting to figure out they’ve been on a bad high.
The legalization of recreational and medical use of cannabis in Canada and several U.S. states has not created the expected demand, and oversupply of the crop has put pressure on prices and the companies aiming to profit from the new industry.
Mark Zekulin, CEO of Canopy Growth recently told The Wall Street Journal, “It’s been a challenging couple quarters in the cannabis sector.”
Yes it has been. Marijuana stocks have been tumbling at several companies, Canopy Growth, Tilray and Cronos Group among them, where shares were down year-to-date through Jan. 23 by 44 percent, 71 percent and 47 percent, respectively.
Not surprising when one considers the cannabis business has not shown much