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CANNABIS 🪴🚨🚨🚨

"Despite Rising Marijuana Use, Cannabis Companies Struggle to Deliver Strong Investment Returns."

The cannabis sector is facing significant challenges despite the growing acceptance of marijuana. The lack of regulatory progress at the federal level in the U.S. seems to be a major factor impacting these stocks negatively, even as public sentiment has shifted more favorably toward cannabis use.

The performance of ETFs like AdvisorShares Pure US Cannabis ETF and companies like Tilray and Canopy Growth highlights the disconnect between societal attitudes and market realities. Investors might have been optimistic about potential growth, but without legislative changes or new markets opening up, many companies are struggling to find a competitive edge.

Operating a legal cannabis business is tough due to federal illegality, making banking and funding hard to secure. High taxes result from non-deductible business expenses. As markets mature, like in Oregon, an oversupply has led to a drop in wholesale prices from $1,750 to under $600 per pound between 2017 and 2023, while retail prices halved, maintaining stagnant profit margins.

The process of approving new amendments can become quite complex, particularly when there is a lot of public backing for legalization. Investors typically seek clear indications of growth potential, so uncertainty regarding regulatory changes may create hesitation about where to direct their investments.