The first wave of U.S.-listed cannabis stocks has been something of a disappointment. Shares of high-growth, multi-state operators (MSO) have slumped in the past couple of years as cannabis producers face pricing pressures in a fiercely competitive U.S. market.
The falling price of the marijuana flower has squeezed companies and pulled stock prices down in the process. Comparing Q3 numbers in 2022 to a year prior, the price of a gram of marijuana fell 13% from $10.83 to $9.43—the largest price decrease ever across a 12-month period.
While U.S. producers have benefited from ongoing state-by-state cannabis legalization, there has been little meaningful progress on national cannabis reform.
The federal government’s Marijuana Opportunity Reinvestment and Expungement Act (MORE) proposes decriminalizing the drug by removing it from the Controlled Substances Act. However, the bill has not been passed by the Senate to date.
Analysts see bigger opportunities for long-term cannabis investors in Canada. Almost five years after recreational cannabis was legalized nationwide in 2018, there is a thriving market for public cannabis companies there.
Many American companies—such as Curaleaf, Green Thumb Industries and Trulieve, among others—are listed on Canadian exchanges and trade as American Depository Receipts in the U.S. OTC market.