Could the U.S. Hemp CBD Market Fail Canadian Cannabis Stocks Too?
Canadian cannabis stocks are going through a rough patch, as investors are frustrated by the slowdown in pot sales growth, and the companies have largely blamed a slower-than-necessary retail store rollout to directly compete with the well-established underground marijuana market for customers. Per-gram prices are falling, while market leader Canopy Growth made a $32.7 million provision for restructuring charges, product returns, and price adjustments after struggling to push its oils and capsules, as demand has proven to be much lower than previously anticipated. Actually, OrganiGram Holdings is facing a similar challenge with its cannabis extracts too and prices are plummeting and channel inventory volumes are spiking, as demand lags supply in the provinces That said, the passing of the U.S. Farm Bill of 2018 opened a new market and growth opportunity for Canadian cannabis firms who were constrained by federal regulation from conducting any marijuana-related business down south. The recognition of hemp (a marijuana family plant) as a crop in America allowed Canopy to pour millions in hemp cannabidiol (CBD) extraction establishments, Village Farms International and Cronos Group have also made moves into the opened up market and are investing in hemp operations there, while Aurora Cannabis and Aphria have…
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