Why is cannabis market low?

In attending this Congress, the cannabis industry was seeking more gradual measures, including the Safe Banking Act, which would allow large financial institutions to deal with cannabis companies in states where the substance is legal; or the STATES Act, which would grant companies that comply with state laws reduce taxes and other measures, not reaching full legalization. In the first, heady days of the legalization of cannabis, owning a licensed marijuana store was considered an easy way to earn money. Even cannabis advocates were alarmed by this figure, fearing that it would allow the illicit tax-free market to flourish. In addition, while the pandemic was a boon for cannabis sales, in a context of high inflation and weakening consumer spending, cannabis companies are likely to face higher costs and lower growth this Most cannabis stocks, including Trulieve, will point to their numbers of relatively high adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) The difference is that cannabis companies would instantly gain a huge profit increase with legalization, which would almost cause them to value stocks and completely change the calculation in an instant.

The most critical factor in the fate of the cannabis industry remains the potential for legalization, or at least liberalization, of cannabis laws in the United States. Debt increases for cannabis companies reached an all-time high, but the three largest transactions accounted for more than 60% of total volume, according to Viridian. However, whatever happens with today's vote, the fate of the legalization of cannabis — and therefore of cannabis stocks — is likely to lie with the Senate, where the path forward is very uncertain at best. Cannabis retailer Superette has received judicial protection from creditors under the Business Creditor Settlements Act.

Viridian Capital Advisors, a New York financial and strategic advisory firm dedicated to the cannabis market, released a report this month outlining its forecasts for the United States. In the midst of rising inflation, higher interest rates and the headwinds of the pandemic, I have reduced my shares in cannabis stocks in recent months. This law allows financial institutions, such as banks, to do business with cannabis companies that are licensed in states that allow cannabis for recreational or medical use. However, that metric excludes stock-based compensation, depreciation costs (which do matter and are ongoing), and interest rates and taxes that are extremely high because cannabis is illegal.

Cannabis-related sales have already surpassed all of Starbucks coffee sales in North America.

Layla Johnson
Layla Johnson

Avid coffee ninja. Incurable twitter ninja. Infuriatingly humble food ninja. Passionate social media nerd. Hardcore food junkie.

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