This was the year when cannabis stocks were supposed to take off.
But shares of all the major pot stocks are down, despite hype about the legalization of recreational marijuana in Canada and some US states. The signing of the Farm Bill by President Trump last fall, which had the potential to boost CBD/hemp sales, hasn’t helped as much as investors hoped.
Cronos Group (CRON) and Canopy Growth (CGC) have plunged more than 60% from their highs earlier this year, and are down about 15% for 2019. The drop in value has hurt the performance of two leading consumer products companies that back them.
Struggling Marlboro owner Altria (MO) has a nearly 45% stake in Cronos, while Corona parent company Constellation Brands (STZ) recently announced it was taking a more than $800 million writedown on its investment in Canopy.
That’s clearly not sitting well with Constellation. Canopy co-CEO Bruce Linton was forced out a few months ago after Constellation CEO Bill Newlands said he was “not pleased” with the company’s results.