Why is the cannabis industry in such a slump?
Poor headwinds and outsized influence of individual investors have dropped valuations at multiple cannabis companies. To understand why investors and financial analysts have cooled on the cannabis industry, just look at the jobs. Previously, marijuana businesses were all growth. If you needed a job and wanted to change fields, cannabis was fertile soil for a fresh start. While you can still find work in cannabis, the biggest players aren’t hiring like they used to. Close to 600 cannabis industry workers have lost their jobs in the past few weeks, according to Business Insider. Layoffs hit everyone from CannTrust to Pax, meaning venture capital won’t save you from the recent downturn in cannabis. But in all cases a similar culprit to blame—the uneasy operating environment of a cannabis business. Inconsistent regulations, high licensing fees, and media backlash from the vaping illness crisis all factor into the tricky variables inside the cannabis industry. Add in lower-than-expected retail sales in legal markets like Canada and California, and the inability to raise capital from regular investment means due to federal laws prohibiting cannabis banking, and you can understand why everyone isn’t as hot on cannabis as they once were. Take The Marijuana Index, for…
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