Last year began with a mountain of promise for the cannabis industry. Canada had recently legalized recreational pot and high-margin derivatives were slated to hit dispensary shelves later in the year. Meanwhile, momentum for state-level legalizations in the U.S., the most lucrative marijuana market in the world, remained high. In short, it looked like the perfect recipe for cannabis stocks to push into profitability.
But hindsight being what it is, we know that this vision didn't come close to reality. As we move headlong into a new decade, marijuana stocks remain unprofitable almost across the board, at least on an operating basis (i.e., without the aid of one-time benefits).
However, if investors haven't done the appropriate amount of digging, they may not realize just how unprofitable cannabis stocks really are. You see, a number of popular marijuana stocks have been able to "trick" investors by posting surprise profitable quarters. I say "trick" in quotation marks because what pot companies are doing is perfectly legal -- but they're not going to advertise that their profit wasn't the result of operational success.