After enjoying a sales surge during the early stages of the pandemic, the U.S. cannabis industry showed signs of slowing down in the face of economic challenges, including declining demand. Last year most cannabis stocks lost at least two-thirds of their value, as a lack of movement on federal prohibition, along with weakness in equity markets, weighed on the sector.
The Canadian cannabis market is facing a supply glut that is driving down wholesale and retail prices. Citing industrywide overproduction, Zach George, the CEO of cannabis producer SNDL Inc. (SNDL), said, “Oversupply and excess capacity have resulted in high-quality flower being widely available and sold well below the marginal cost of production.”
