Canadian Cannabis Companies Collapsed; Are US MSOs Next?

Canadian Cannabis Companies Collapsed; Are US MSOs Next?
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Playing the stock market means navigating a high-wire act between profound regret and untold reward, but in cannabis, it’s mostly the former. Over the past decade, second only to cryptobro regret is the FOMO felt by investors in Canadian cannabis stocks, where a brief, meteoric rise gave way to an even more sudden and spectacular crash. If you cashed out at just the right time, you might have done great; if you put in $1,000 as early as you could and maintained diamond hands throughout, you might have about $200 today, as Franklin G. Snyder, a law professor at Texas A&M University who studies cannabis legalization tells his students.  And the bust is real. Last month, Aurora Cannabis—a company with global ambitions and a key medical-marijuana license in Germany—announced it will close three facilities and lay off 12% of its global workforce, or about several hundred jobs. That followed prior layoffs in September and another 1,200 layoffs in 2020.  But with most American cannabis companies still reporting losses in the tens of millions, and with sales figures from early 2022 suggesting that sales have finally plateaued, does the tale of Canadian cannabis stocks mean anything for the US-based multi-state operators (MSOs)? Yes, but also no, experts said. Overweight, Underfed… During Q1 earnings calls in May, only one major US cannabis company—Green Thumb Industries—reported turning a profit. Everyone else lost money. Curaleaf reported losing $23.5 million in the first three months, compared to $14.8 million a year before. Cresco Labs reported a loss of $23.6 million. Columbia Care, with whom Cresco is merging, reported losses of $27.9 million. Trulieve, the biggest player in Florida, lost $32.4 million.  In a sign of some turmoil, some companies, including Curaleaf, also shook up their C-suites, with executives who earn $475,000 or above leaving the company or switching posts, according to…

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