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Marijuana Stocks: Here's How Much Share-Based Dilution Cost Investors in 2018

Pot stock investors had a miserable year

However, a perfect year it was not for investors in marijuana stocks. In fact, it just about couldn't have gone any worse. The most-followed cannabis ETF, the Horizons Marijuana Life Sciences ETF , shed about 45% of its value since the year began. Considering that it was actually up on a year-to-date basis by 8% in mid-October, the drop over the past two-plus months has been brutal.

There are no shortage of reasons for Wall Street and investors to be skeptical of pot stocks heading into the new year. More than half of all Canadian provinces are experiencing a supply shortage that probably won't correct in the upcoming year. Between growers needing to complete their expansion projects and Health Canada drowning in cultivation license applications and sales permit applications, there doesn't appear to be an easy way to fix the country's supply issues.

The marijuana industry also didn't do much to inspire confidence following the latest round of earnings results. Even though recreational sales aren't included in the newest earnings reports, the gist is that pot stocks are losing a lot of money right now without the aid of one-time benefits and fair-value adjustments on biological assets.

Marijuana IPOs in 2019: These companies could be the next hot pot stocks

 — Now have to deliver on the promises they made to investors.

A guide to pot stocks: What you need to know to invest in cannabis companies

“The easy money — if there is such a thing as easy money — is kind of gone for early-stage companies,” Wilson said. “We’ve seen a big runup in the early movers and the stock prices have run but have now corrected. Investors want to see actual revenues and net income and implementation of business plans. A lot of these companies have up until this point just been fully funded business plans.”

Where investors can expect to see IPO action is south of the 49th parallel, where cannabis remains illegal under federal law, a fact that has not deterred some operators from listing on the one place that will accept them: the Canadian Securities Exchange . There are also a number of pot-adjacent technology and product companies that don’t actually handle marijuana themselves and may be able to list on larger exchanges. It’s also possible that, following the recent passage of the farm bill, that several hemp-focused companies will list in the U.S.

Is the recession over?


Hey, look at that idiot right above me blaming conservatives. We have been telling them for months and months that a mega-depression is coming. We told them they were a big fail. We told them they were like locusts...destroying and then pointing the finger.