A year after legalization, the honeymoon is over for Canada’s cannabis industry. Many producers are reporting disappointing earnings; some have seen crop failures; turnover is high in the executive suite; and so far, prices in the legal industry are far higher than in the black market.
And the illicit market is hanging in there: Despite promises by advocates that legalizing marijuana would take the industry out of the hands of organized crime, Statistics Canada data shows the black market shrank by just 21 per cent over the past year.
Investors’ faith has been shaken. The North American Marijuana Stock Index — which for now is dominated by Canadian producers — has lost half its value in the past six months.