The cannabis sector in Canada has a positive impact on the country’s economy, despite the underperformance of weed stocks on the TSX.
Likewise, the industry contributed 151,000 jobs to the labour market since the legalization of recreational marijuana in 2018.
Industry consultancy firm New Frontier Data estimates the market could surpass US$50 billion by 2025, although it would be a huge gamble to take a position today.
Stifel analyst Andrew Carter said, “There’s a lot of growth in the Canadian market, but the problem is where it’s going.” He thinks the market supports oligopolistic structures similar to the banking and telecom sectors.
Craig Wiggins, managing director of independent cannabis research firm The Cannalysts Inc., said the sector is uninvestable.
The $3.54 billion cannabis producer has a commanding market share in Canada, but it hardly attracts investors’ attention.
Pablo Zuanic, an analyst at Cantor Fritzgerald, warned people that investing in cannabis in 2022 might be worth dead money if federal legalization efforts wane.
In Q2 fiscal 2022, Canopy’s net loss improved by $80 million to $16 million versus Q2 fiscal 2021.
Even if management says the company is moving in the right direction, investors are fed up with empty promises.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor.