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CANNABIS INDUSTRY 

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420 Day: Blood on the Tracks for Cannabis Investors Despite Increasing Legalization

420 Day: Blood on the Tracks for Cannabis Investors Despite Increasing Legalization

It’s been a rough year for cannabis company stocks, even as more states in the US move to legalise or decriminalise cannabis. A cannabis fund launched on 420 day last year has lost 72% of its value!

Carmen Reinicke, Bloomberg News

21 April 2023 at 13:00:00

The Roundhill Cannabis ETF (Weed) has declined nearly 72% since its launch one year ago on 420 Day — an unofficial pot holiday — as the stocks it holds have lost investors nearly $12 billion in value. 


The MJ PurePlay 100 Index, which includes 100 cannabis-related stocks, has shed 65% in the same timeframe.


Pot stocks have struggled this year after the industry was dealt a major blow in December when legislation that would’ve allowed more banks to work with legal cannabis companies was taken out of a roughly $1.7 trillion funding measure. It was the third failed attempt to attach the legislation, called the SAFE Banking Act, to a bill last year.


Without the passage of SAFE, banks are largely prohibited from working with marijuana-linked companies because the substance is illegal on the federal level. This forces many companies to work in cash or invent ways around the banking system. 


Cannabis companies are also subject to the same tough market, potentially weakening economic outlook and rising interest-rate environment that’s weighing on other stocks. Curaleaf Holdings Inc., for instance, has cut some staff, had a New Jersey license renewal declined and this week said it misstated revenue in 2022 and 2021 financial statements, adding to the 62% drop from a year earlier.


Still, Wall Street is still largely bullish on cannabis companies and the industry in the long-term. Curaleaf has 15 buy ratings, 2 holds and 0 sells, according to data compiled by Bloomberg.

That’s because if regulatory hurdles go away, the stocks would be poised for growth, said Gerald Pascarelli of Wedbush, adding that it may take years.


But looking at the relative valuations of the stocks, how new the industry is and the growth prospects, “there’s certainly upside,” he said.

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The Justice Department took flak in Parliament this week during stakeholder input into the Cannabis for Private Purposes Bill where it became evident that state law-makers are clueless as to what Government's intended vision for cannabis is. They remain conceptually and technically completely out of their depth - and lazy to boot as they have not bothered to bring any rational evidence to back up what is truly a pathetic legislative interpretation of the 2018 Constitutional Court ruling legalizing the private consumption of cannabis.

Justice Dept Admits No Rational Evidence Behind Plant Limits in Cannabis Bill as State Lawyers Come Under Fire in Parliament

The Justice Department took flak in Parliament this week during stakeholder input into the Cannabis for Private Purposes Bill where it became evident that state law-makers are clueless as to what Government's intended vision for cannabis is. They remain conceptually and technically completely out of their depth - and lazy to boot as they have not bothered to bring any rational evidence to back up what is truly a pathetic legislative interpretation of the 2018 Constitutional Court ruling legalizing the private consumption of cannabis.

Cannabis and solar power to be the key economic recovery drivers in rebuilding the devestated community of Jagersfontein following the flood disaster eight months ago.

Re-Imagining Xhariep: Free State Launches Mega Cannabis Project in Jagersfontein After Last Year’s Mine Dam Tailings Disaster

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Government has made no official announcement about the "significant spike" in raising acceptable THC levels in hemp. It signalled its intentions in a clause in the Cannabis for Private Purposes Bill which will be welcomed by stakeholders. However, cultivar restriction could self-sabotage all the good intentions.

SA to Lift Hemp THC Limit to 2% But Cultivar Restrictions Remain a “Lethal Impediment” to the Industry

Government has made no official announcement about the "significant spike" in raising acceptable THC levels in hemp. It signalled its intentions in a clause in the Cannabis for Private Purposes Bill which will be welcomed by stakeholders. However, cultivar restriction could self-sabotage all the good intentions.

420 Day: Blood on the Tracks for Cannabis Investors Despite Increasing Legalization

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