Investor losses highlight Canadian market struggles

According to new research, Canadian investors have lost C$131 billion by investing in the cannabis stock market.

First reported by CTV News, the data was put together by law firm Miller Thomson and is based on the total losses of 183 publicly traded licensed cannabis producers.

“It's an industry that has been created by the Canadian government and frankly set up to fail,” said Larry Ellis, a lawyer with the firm. This sentiment has permeated the entire Canadian cannabis stakeholder scene for some time now.

Confusing marketing regulations, licensing woes and an oversaturation of cannabis products and stores have all contributed to the troubles plaguing the market. At the same time, mistakes from publicly traded companies, including miscalculations about Canadian consumers, have also played a big role in the industry's financial slowdown.

“It all comes down to just bad planning and exuberance,” Nawan Butt, portfolio manager with Purpose Investments, previously told the Investing News Network, referring to the amount of waste produced by Canada's cannabis companies.

Matt Hawkins, founder and managing principal of Entourage Effect Capital, has said his fund currently has no appetite for Canadian operators, and he doesn't know of many other investors that are remotely interested.

“I think they are flawed business models for the most part,” he said.

US looking to open doors to cannabis research

A new piece of US legislation is set to spur more advanced research of the cannabis plant, a significant victory for science.

This week, the Senate approved a bipartisan bill to ease current regulations that are slowing down cannabis research. The bill will now head to US President Joe Biden for his signature.

Dubbed the Medical Marijuana and Cannabidiol Research Expansion Act, the bill is designed to allow universities and private corporations to pursue cannabis growing and handling licenses from the Drug Enforcement Administration for research purposes.

According to Marijuana Moment, Senate Majority Leader Chuck Schumer said he hopes to see Democrat and Republican senators come together for more cannabis policies.

“I hope after passing this bill the Senate can make progress on other cannabis legislation, too,” he said.

Cannabis company news

• TerrAscend (CSE:TER,OTCQX:TRSSF)issued its Q3 financial results for shareholders. The firm reported a net loss of US$311 million, while posting a 3.4 percent net revenue increase to US$67 million.

• Cronos Group (NASDAQ:CRON,TSX:CRON)confirmed the hiring of James Holm as its new CFO in the wake of settlement agreements with stock regulators in the US and Canada. The settlements came after accounting wrongdoings from former CFO and Chief Commercial Officer William Hilson.

• SNDL (NASDAQ:SNDL)approved the renewal of a program to repurchase up to C$100 million of its own shares. The new program will last until November 20 of next year.

• HEXO (NASDAQ:HEXO,TSX:HEXO)signed a new supply agreement with Entourage Health (TSXV:ENTG,OTCQX:ETRGF) under which HEXO will provide bulk dried cannabis and soft-gel capsules.