Although pot stocks have enjoyed a heady start in 2019 due to global marijuana legalisation efforts and the burgeoning use of CBD as a wellness product, backers are starting to judge their investments by profitability instead of hype, and patience is wearing thin.
Of the five largest Canadian pot companies, only Cronos Group is expected to report adjusted net income by the final quarter of the year, according to data. Instead of profit, write-downs related to unfinished inventory may be in the offing for some Canadian companies.
That has some investors voting with their feet, moving out of Canada and into the US, where the marijuana companies are generally performing better, despite a patchwork of state-by-state regulations.
“It’s symbolic that the Canadian guys have really not been able to deliver on some of their expectations and the US companies have,” said Greg Taylor, chief investment officer at Purpose Investments and manager of the Purpose Marijuana Opportunities Fund.