The Canadian cannabis industry has been on a wild ride heading into legalization in 2018, and in the years following. Companies in this sector saw their valuations surge to multi-billion dollar market capitalizations (in many cases) as expectations of sky-high growth in a fully legalized market created a euphoria around this sector, which isn’t typically seen within the Canadian stock market.
Companies like Canopy Growth (TSX:WEED) and Aurora Cannabis (TSX:ACB) saw absolutely remarkable valuations as investors looked to pinpoint which companies would see the greatest upside from legalization. However, as the stock charts below show, it’s been a rough past five years for these former high-flying growth stocks in particular, and most in the sector.
Now, the question is whether it’s possible the cannabis bubble could re-inflate, and what would drive outsized interest once again in these two stocks, and this sector as a whole.
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