Wall Street’s exuberance more than legal weed has promptly withered into sober reality.
In a matter of months, white-hot cannabis firms have flamed out in spectacular style. Numerous have lost two-thirds or a lot more of their worth.
Widespread legalization has been thwarted. Bank financing has dried up. Deep-pocketed institutional investors stay on the sidelines and old-fashioned black-marketplace dealers nevertheless offer stiff competitors.
The discomfort deepened on Thursday, when Ontario, Canada-primarily based Canopy Development Corp. announced income that fell brief of the lowest Wall Street estimate and a loss that a single analyst named “astounding.” That sent shares to their lowest value given that December 2017. It is nevertheless the biggest pot business in the planet, but at $7.1 billion Canadian, its marketplace worth is just a sliver of the $24 billion it reached in April.
A single day later, MedMen Enterprises Inc. of Culver City, a single of the very first U.S. cannabis firms to sell shares to the public, said it would dismiss 190 workers, like about 20% of its corporate workforce, as it struggles to preserve a dwindling money pile.
Published: November 16, 2019
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