Pot stocks have cost exchange-traded fund (ETF) holders 40 percent since Canadian legalization leading to a down-turn in sentiment from investors, new research says.

Horizons ETFs Management, the company behind one of the most popular cannabis ETFs in Canada, published its quarterly survey results of advisors and investors on Monday (January 21).

The survey shows the decline of cannabis stocks has caused losses taking an impact on the bullish sentiment for these securities.

On the overall Canadian markets, the report indicates “advisor and investor bullishness has declined on nearly all asset classes heading into the new year.”

Steve Hawkins, president and CEO of Horizons ETFs, said the post-legalization correction had caused a “more reserved attitude” towards marijuana investing moving into 2019.

Horizons asks for input from advisors and investors of the public markets and shares the results on a primary way with bullish, bearish or neutral sentiment expression.

“Marijuana equities, as represented by the North American Marijuana Index, lost more than 40 [percent] after recreational legalization in Canada,” Horizons indicated in its report.

Horizons portfolio holds two cannabis ETFs, the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ) and the Horizons Emerging Marijuana Growers Index ETF (NEO:HMJR)

According to the survey results, both advisors and investors of the public space have expressed a “steep loss of positive expectation” for the cannabis sector.

Only 31 percent of respondents indicated a positive or bullish outlook on pot stocks.

Despite the gloomy outlook, Hawkins expects the growth of the industry to continue as companies show financial stability.

“As more of these Cannabis-sector companies begin to demonstrate their fundamentals through financial reporting, there will be a solid footing for analysts upon which to base their expectations for the industry – ensuring a measured outlook on growth,” Hawkins said.

Despite sentiment slowing down, projections continue to show massive industry

Earlier in January Vivien Azer, managing director and senior research analyst specializing in the beverage, tobacco, and cannabis sectors for financial institution Cowen (NASDAQ:COWN), raised her outlook on the value of the space.

The analyst wrote she expects the US cannabis market to represent sales of US$80 billion by 2030.

Similarly, a new study from the Arcview Group and BDS Analytics projected the global recreational sales of cannabis will amount to US$16.9 billion in 2019.

Beyond 2019, the Arcview Group is calling for recreational cannabis sales only to hit US$31.3 billion in 2022.

Investor takeaway

While those surveyed for the Horizons report demonstrate a bleak outlook on pot stocks right now, long-term projections show substantial returns awaiting investors.

Many factors played into the decline of stocks across the board in the public space.

However, the cannabis space is suffering some hits as Canadian companies continue to deploy assets for the adult-use market and eagerly await the entrance of edibles in the country, scheduled later this year.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

American cannabis sales hit US$17.5 billion in 2020, a research group’s new study shows.

Meanwhile, a Canadian cannabis producer began offering CBD beverages in the US, another move that shows how interested Canadians are in the overall US cannabis market at the moment.

Keep reading... Show less

An Emerging Markets Sponsored Commentary

Some pretty important news out of health and wellness; beverage and natural products company BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) this week. For those of you following the Company with us, stay tuned.

Keep reading... Show less

As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.

A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.

Keep reading... Show less

The product will include polyphenols known to have significant health benefits.

BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.

Keep reading... Show less

Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.

The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).

Keep reading... Show less