Wall Street Downgraded This Popular Pot Stock and Slashed Its Price Target by 70%

To say that marijuana stock investors have had a rough ride in recent months would be a brutal understatement. Following a first quarter that saw most pot stocks run significantly higher, cannabis stocks have spent much of the past 10 months (since the end of March 2019) in a precipitous downtrend.

To our north, Canadian pot stocks have been hurt by supply issues. Health Canada has not been quick to approve cultivation and sales license applications, and it ultimately delayed the launch of high-margin derivatives. Meanwhile, Ontario, the country's most populous province, had been relying on a lottery system to award retail locations, which, frankly, didn't work. At the one-year anniversary of adult-use sales commencing, just 24 dispensaries were open in Ontario.

In the United States, it's been more of a tax issue than a supply problem. High tax rates in recreationally legal markets have made it impossible for legal producers and retailers to compete against black-market growers. The result, as you've seen, is considerably lower marijuana stock valuations.

Source Fool.com