CRLBF - No Joke: California Will Increase Its Cannabis Tax on Jan. 1
When the year began, marijuana was supposed to remain the hottest investment opportunity on Wall Street. Canada had legalized recreational weed in Oct. 2018, derivative products were forecast to hit dispensary shelves by Oct. 2019, and a number of U.S. states had been pushing for medical or recreational legalization. The stage appeared to be set for success -- and then someone turned out the lights.
Since the end of the first quarter, virtually no pot stocks have moved higher. Not only are most marijuana stocks down, but most have lost half or more of their value. This train wreck can essentially be boiled down to a handful of factors.
To our north, Canada has been plagued by persistent supply issues and regulatory delays since day one of legalization. Health Canada has been slow to approve cultivation and sales license applications, thereby keeping legal product off the market. All the while, the country's most populous province, Ontario, has just two dozen open dispensaries for consumers to purchase from. Both factors have led to a scenario where black market marijuana has thrived.