The first wave of U.S.-listed cannabis stocks was a bit disappointing. Shares of high-growth multistate operators (MSOs) have fallen in recent years as cannabis producers face price pressure in the competitive U.S. market.
The falling price of marijuana flower has squeezed companies, pushing down stock prices in the process. Comparing the numbers for the third quarter of 2022 to the same period last year, the price of a gram of marijuana fell 13% from $10.83 to $9.43. This was the largest price drop on record in a 12-month period.
While U.S. producers are benefiting from ongoing state-by-state cannabis legalization, little meaningful progress has been made on national cannabis reform.
The federal Marijuana Opportunity Reinvestment and Expungement (MORE) Act proposes to decriminalize marijuana by removing it from the Controlled Substances Act. However, this bill has not passed the Senate to date.
Analysts see greater opportunity for long-term cannabis investors in Canada. Nearly five years after recreational cannabis was legalized nationwide in 2018, the market for public cannabis companies is booming locally.
A number of American companies, such as Curaleaf, Green Thumb Industries, and Trulieve, are listed on Canadian exchanges and traded as American Depositary Receipts on the American OTC market.
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