The Marijuana Industry’s Struggles: A Cautionary Tale
The marijuana industry has faced significant challenges since its inception, and one of its flagship stocks, Tilray, is a prime example of its struggles. In late 2018, Canada legalized marijuana, and investors flocked to pot companies, hoping for a domino effect of legalization in other countries. However, this hasn’t happened to a significant degree, and the domestic market is plagued by problems.
A $1,000 Investment Gone Wrong
A $1,000 investment in Tilray’s U.S.-listed stock in late 2018 would be worth a mere $11 today, a staggering decline of almost 99%. This drastic drop is akin to burning nearly an entire pile of money. The Canadian pot industry has struggled since its inception, with many companies, large and small, springing up around the time of legalization.
Challenges Abound
The slow rollout of the official weed market in certain provinces, such as Ontario, has hindered growth. Additionally, the persistence of gray and black markets for the drug has further complicated matters. Tilray has attempted to pivot by acquiring U.S. craft brewers, but the booze business isn’t a growth story, and the company continues to struggle with net profits.
A Cautionary Tale
Tilray’s stock price is low for a reason. Despite its efforts, the company faces significant competition on both sides of the U.S./Canada border. Its net profits have been rare and anemic, making it a company to avoid. Investors should be cautious and not fall prey to the allure of a low stock price.
Missed Opportunities?
Ever feel like you’ve missed the boat on buying successful stocks? Our expert team of analysts issues rare “Double Down” stock recommendations for companies they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. With impressive returns on companies like Nvidia, Apple, and Netflix, our “Double Down” alerts can help you make informed investment decisions. See which three incredible companies are poised for growth today!
Leave a Reply