The cannabis industry in Canada is hurting, and the danger is that things could get even worse. Investors have been bearish on the industry as companies have been shedding jobs, making leadership changes, and, of course, posting disappointing financial results. And there's little hope that things will improve anytime soon.
There are three reasons why investors shouldn't be too optimistic about the Canadian cannabis industry in 2020.
There's a lot of growth still left in the Canadian market as a slow retail rollout and supply issues plagued the country's first year of legal pot. The problem is that the red tape in the industry is still making black-market products more attractive, and the gap in prices is getting wider. With many restrictions surrounding advertising and how big edible packages can be, it's probably easier for consumers to find the products they want from illicit sources. And given the price discrepancy, there's even less of an incentive to buy from legal sources.