The Financial Post reports in its Saturday edition that nearly one year after cannabis was legalized, it has been a nightmare for investors. The Post's Victor Ferreira writes that since recreational cannabis became legal on Oct. 17, 2018, the shares of what were then the 10 largest Canadian cannabis producers by market capitalization have been bludgeoned, yielding an average negative return of more than 57 per cent. Tilray alone has lost more than $14-billion in market cap, and Aurora has shed $6.8-billion. Prior to legalization, cannabis stocks soared on the promise of massive growth and the tremendous momentum that retail investors brought as they poured into the sector. Now that excitement has been drained, said Richardson GMP portfolio manager Chris Kerlow, and it is unlikely to return. "A psychological shift has taken place from everyone wanting to own (cannabis) to everyone involved now feeling burned," he said. "I think many investors are now over [cannabis]." Legalization played out like a classic "buy the rumour, sell the news" situation, Mr. Kerlow said. While most analysts held a positive outlook on legalization, skeptics at Veritas Investment Research warned about the end of the "cannabis rainbow."
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