From flying high a year ago, the cannabis market is turning out to be a bust for many investors.
As well noted, the Trends Journal was the first magazine to forecast “Reefer Money Madness,” (i.e. marijuana decriminalization) with the U.S. market expected to grow more than $200 billion in annual sales of cannabis in the coming decade.
In fact, iAnthus, a New York cannabis grower/vendor/processor, believes that 55 percent of U.S. adults will purchase the products within ten years.
The equities of iAnthus, however, have dropped close to 80 percent since March, after rising 150 percent one year ago. iAnthus will list in Canada, as opposed to the U.S., where most brokerages won’t trade cannabis stocks because it is currently illegal under federal law.
Shares are down by almost a third this year, likely resulting from the delay of its legalization in the United States. New York, New Jersey, and Connecticut have sat on legislation allowing it.
The Canadian market was the first of the G7 countries to legalize pot, but the street dealers are still cheaper.
The supply exceeds demand, as about 400 tons is currently warehoused.
Cowen Inc. said that the market has been “more incremental than exponential in 2019.”
The ban on cannabis in the U.S. disqualifies small companies from obtaining loans from bigger banks, which drives down their stocks.
In September, the House of Representatives passed the Safe Banking Act, preventing the penalization of banks that lend to official cannabis companies. In November, the House also pushed ahead a bill, called the More Act, which was meant to decriminalize pot at the federal level.
The general consensus is a divided Congress, however, is unlikely to agree on the bill.
TRENDPOST: Approximately half of all drugs busts in the U.S. are for possession of marijuana and usually in small amounts. In fact, in 2018, 663,367 people in America were arrested for violating a marijuana law, and 608,775 of those arrested charged the person simply for possession.
And in keeping with former New York mayor (now Democratic candidate in the Presidential Reality Show), Michael Bloomberg’s “Stop and Frisk” policy that discriminates against minorities, despite equal usage of the substance, blacks are almost four times as likely as whites to be arrested for it.
The prison population in the U.S. is 716 prisoners per 100,000 people – five times higher than other countries.
