There’s no question that legal cannabis has seen massive market growth over recent years. According to data from Leafly, an online marijuana marketplace, legal U.S. cannabis sales—medicinal and recreational—increased 35% in 2021, to a total of $24.6 billion.
However, the first wave of U.S.-listed cannabis stocks has been something of a disappointment. Shares of high-growth, multi-state operators (MSOs) have slumped in 2022 as cannabis producers face pricing pressures in a fiercely competitive U.S. market.
In U.S. states with mature marijuana markets, like California and Colorado, prices have fallen significantly. The price of most cannabis categories are near record lows in Colorado, with the price of flower down 50% and the price of trim down 41% year-over-year.
While U.S. producers have benefited from ongoing state-by-state cannabis legalization, there has been little meaningful progress on national cannabis reform. Even with Democrats in control of the White House and both houses of Congress, the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act and the Secure and Fair Enforcement (SAFE) Act have stalled in the Senate.
Cantor Fitzgerald’s analysts see bigger opportunities for long-term cannabis investors north of the border, in Canada. Four years after recreational cannabis was legalized nationwide in 2018, there is a thriving market for public cannabis companies.
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