In April 2019, the North American cannabis industry was riding high. The stock market value of public cannabis companies had tripled over the last year and a half. Investors observed legalization sweeping the US, and saw the opportunity to get in on the ground floor of an industry projected to become worth tens of billions of dollars.
Over the next year, the cannabis bubble would burst. For many companies it would be a full-on disaster. Of the 40 publicly-listed cannabis companies in North America worth at least $40 million, only seven saw their stock market valuation grow from April 2019 to July 2020. Of those 40 companies, 24 lost more than half their value, and 13 were nearly wiped out, losing nearly 80% of their valuations. Most of this decline happened before the coronavirus sent the global economy into a tailspin. (Our selection of companies comes from the Marijuana Index, which tracks the stocks of leading public cannabis companies.)
None of the top three performers since April 2019 are plant-touching THC companies. Rather, they are an equipment company (GrowGeneration), a company that makes CBD products like sleep aids and dog treats (cbdMD), and a firm that finds real estate for cannabis companies (Innovative Industrial Properties).