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Are Major North American Cannabis Stocks Profitable?

When it comes to cannabis stock offerings, North America’s emerging cannabis market is likely the first thing that pops into people’s minds. Canada became the first G-7 nation to legalize cannabis nationally for adult-use in 2018. Cannabis remains prohibited at the federal level in the U.S., however, 24 states have adopted recreational cannabis legalization measures.

Investing in North American cannabis stocks is not for the faint of heart, and as pricing trends demonstrate, it’s not something that will make someone rich overnight. According to initial reporting by Financial Times, major North American cannabis stocks have lost a considerable amount of their value in recent years.

“Canopy Growth, once Canada’s most valuable marijuana company, with a market capitalisation of $25bn at its peak, is now worth $800mn. Tilray Brands has seen its market value collapse from $10bn to $1.5bn. Shares in Curaleaf, the biggest cannabis company by revenue, are down 73 per cent from their highs. The stocks of three other major operators — Trulieve Cannabis, Green Thumb Industries and Verano Holdings — have respectively shed 82 per cent, 66 per cent and 84 per cent of their value since 2021.” Financial Times stated in its original reporting.

“All in all, AdvisorShares Pure US Cannabis, the biggest marijuana-focused exchange-traded fund by trading volume and asset size, is down about 82 per cent from its peak.” Financial Times also stated.

Canada’s emerging legal cannabis industry sold C$414.1 million worth of cannabis products in March 2024, up 7.1% compared to February 2024. Canada first legalized adult-use cannabis sales in October 2018.

“The sales were up just 1.9% from a year ago. This was down from the 19.8% August growth rate and up from the lowest annual growth rate (in January) since legalization commenced of 1.6%. In 2023, total sales increased 12.5% to C$5.09 billion, and in 2024 they have increased just 3.2% from a year ago.” New Cannabis Ventures stated in its initial reporting.

The United States adult-use cannabis industry has generated over $20 billion in total tax revenue since the first legal recreational cannabis purchase was made in Colorado on January 1st, 2014 according to a new report by the Marijuana Policy Project.

“Through the first quarter of 2024, states have reported a combined total of more than $20 billion in tax revenue from legal, adult-use cannabis sales. In 2023 alone, legalization states generated more than $4 billion in cannabis tax revenue from adult-use sales, which is the most revenue generated by cannabis sales in a single year.” the Marijuana Policy project stated in a press release.

Total legal cannabis sales in the United States are expected to reach $31.4 billion in 2024 according to a recent analysis by Whitney Economics. Additionally, leading cannabis jobs platform Vangst, in conjunction with Whitney Economics, estimates that the legal cannabis industry now supports 440,445 full time-equivalent cannabis jobs in the United States.

Whitney Economics also projects the following legal cannabis sales figures in the United States for the coming years:

  • 2024: $31.4 billion (9.1% growth from 2023)
  • 2025: $35.2 billion (12.1% growth from 2024)
  • 2030: $67.2 billion
  • 2035: $87.0 billion

The emerging legal cannabis industry in the United States is projected to add roughly $112 billion to the nation’s economy in 2024 according to a newly released analysis by MJBiz Daily. The projection is part of the company’s 2024 MJBiz Factbook.

“The total U.S. economic impact generated by regulated marijuana sales could top $112.4 billion in 2024, about 12% more than last year,” MJBiz stated in its initial reporting.