Why Marijuana Legalization Could Be Bad News for Canopy Growth and Tilray Brands
Marijuana legalization in the U.S. has been a hot topic of late as there's growing excitement about the possibility that significant reform will take place in the industry. A couple of companies that are eager to enter the U.S. pot market include Canopy Growth (NASDAQ: CGC) and Tilray Brands (NASDAQ: TLRY).
Having access to the world's largest pot market would be a huge opportunity for these businesses. But investors should be careful of assuming that it will make them both good buys or that their stock gains afterward will wipe out the losses investors have incurred on these troubled stocks thus far. Here's why legalization could actually be a bad thing for these two stocks.
Unlike when Canada legalized recreational marijuana in 2018, there are already marijuana companies in the U.S. that are in the recreational market. It won't just be a massive rush to grab land and market share; Canadian-based pot producers will have to fight for it with established companies. The quasi-legal environment where pot is federally illegal but legal in many states has allowed the industry to grow in the U.S. despite being off-limits to Canadian producers like Canopy Growth and Tilray Brands.
Source Fool.com
