Canada Legalized Marijuana 5 Years Ago. Why Is the Industry Now in Such Bad Shape?
On Oct. 17, it will be five years since Canada legalized recreational marijuana. The creation of a legal pot industry was supposed to provide cannabis companies with attractive growth opportunities. But it hasn't worked out that way. Marijuana producers in Canada have struggled since legalization, and that's putting it lightly. In fact, Canadian pot stocks have been some of the worst investments you could have owned over the past five years. During that time frame, shares of Tilray Brands (NASDAQ: TLRY), Canopy Growth, and Aurora Cannabis, which were once seen as the industry's leading companies, have lost 99% of their value.
Why is the industry in such bad shape? And should investors expect things to get better?
Today, there are close to 1,000 licensed cultivators, processors, and sellers in the Canadian pot market. As of the end of 2018, there were about 134 companies that were licensed under the Cannabis Act. The sheer growth during those years highlights just how many businesses have been rushing in to try and capitalize on the industry's growth prospects.
Source Fool.com
