1 Shocking Number That Should Have Investors Thinking Twice About Pot Stocks
In the Canadian cannabis industry, legalization has made things worse for investors, not better. Companies are dealing with red tape, excise taxes, and more competition. Meanwhile, the black market still undercuts the price of legal pot. It has been a disastrous result for both companies and investors in these businesses. It's a painful but important lesson, one that should remind investors that even if the U.S. were to legalize marijuana, that doesn't mean U.S.-based pot stocks would suddenly rise in value and become great investments.
According to law firm Miller Thomson, Canadians have lost 131 billion Canadian dollars investing in the cannabis industry. One of the lawyers at the firm, Larry Ellis, says, "it's an industry that has been created by the Canadian government and frankly set up to fail."
It's hard to argue that point, as marijuana advertising is essentially non-existent in Canada, and even branding faces extreme limitations as packages are standardized and are full of warning labels, with only tiny areas available for logos. Limits on size also mean that recreational consumers can easily find larger quantities on the black market.
Source Fool.com
