Cannabis stocks are on a major downer. The only good news is that U.S. pot companies are better able to cope with low valuations than they were during the last crunch.
The selloff in riskier stocks has hit U.S. marijuana businesses hard. The
AdvisorShares Pure Cannabis ETF,
one of the larger funds tracking the sector, is down 22% this year even after a poor 2021. The fund lost almost one-third of its value last year as hopes of marijuana reform in Washington faded.
Weak stocks are tricky for the industry. Big banks won’t lend to pot businesses while the drug remains federally illegal, so they rely heavily on issuing shares to raise funds for expansion and deal making. This option is unappealing now that low share prices would dilute existing shareholders. For the first…
