An Aurora Cannabis-Aphria Merger Would Be a Bad Idea

If you think the stock market has had a wild year, take a peek at cannabis stocks, which over the past three years have skyrocketed and imploded.

Back in 2017 and 2018, you could have been blindfolded and chosen a pot stock from a list of publicly traded companies and landed yourself a winner. Prior to the legalization of adult-use weed in Canada on Oct. 17, 2018, promises of capacity expansion, international sales, and acquisitions were often more than enough to send marijuana stock valuations into the stratosphere.

However, that's not been the case since the end of March 2019. The vast majority of pot stocks have seen their valuations decline by 50% (or more) as supply issues in Canada, high tax rates in the U.S., and financing concerns throughout North America, have burst the industry's bubble. All next-big-thing investments undergo growing pains, and the cannabis industry is working its way through a rough patch of its own at the moment.

Continue reading

Source Fool.com