Cannabis Shares Underperform Going Into Year-End Amid U.S. Regulatory Logjam

Suzanne Cosgrove

Suzanne Cosgrove


Although adult-use sales of cannabis remain robust in U.S. states where it is legal, Nasdaq IR Intelligence analyst Saleem Daya sees continued stock underperformance across the cannabis space going into year-end, building on activity in the second and third quarters of 2021.

In an interview with John Lothian News, Daya notes the benchmark Solactive North American Marijuana Index is about 13% lower this quarter and is down close to 20% year-to-date, a move he attributes to disappointment that the U.S. federal reform that many were hoping for in early 2021 has not taken place and impatience with a regulatory process that remains mired in disagreement over its scope and depth.

Asset flows into major cannabis ETFs, which tend to be top holders across the sector, have fluctuated wildly, Daya says, and more volatility is likely in the year ahead.


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