Written by Aditya Raghunath at The Motley Fool Canada
Canadian cannabis stocks have been among the worst-performing companies on the TSX in the last five years. Shares of most cannabis producers were trading near all-time highs when Canada legalized marijuana for recreational use in October 2018, driving investor optimism in the process.
Canadian marijuana producers, including Canopy Growth (TSX:WEED), invested heavily to expand their manufacturing capabilities and allocated significant resources towards acquisitions. However, the tight regulations associated with this sector led to the slow rollout of retail stores in major Canadian provinces. Additionally, restrictions on advertisements made it difficult for brands to differentiate themselves from competitors. Licensed cannabis producers also had to wrestle with competition from lower-priced products available in the illegal market.
These headwinds led to…
