While a new glut of semi-legal weed has helped sink prices, industry executives and investors say the lack of progress on federal marijuana legislation is the single biggest factor driving the sector’s economic downturn — and it’s unclear when their odds will improve.
In the ensuing 16 months, Democrats in Washington have done nothing to lift federal cannabis restrictions, and the once-bright outlook for legislative progress has dimmed.
Industry experts point to other factors that have exacerbated the economic doldrums. In some states, there’s simply too much product, leading to plunging prices.
Littlejohn points to another factor that has scuttled the industry’s growth: the continued vibrancy of illicit markets.
So they ate more Campbell’s Soup than ever in the history of Campbell’s Soup,” said Jonathan Sandelman, CEO of Ayr Wellness, a multistate cannabis company that’s seen its stock price tumble by more than half over the last year.
The AdvisorShares Pure US Cannabis ETF — a pooled collection of cannabis assets that’s a popular gauge of the broader industry — saw its price fall more than 50 percent over the last year.
Legalization has spread rapidly across the country, with 37 states now permitting medical sales and 18 states allowing anyone at least 21 years old to possess and consume marijuana.