Early signs indicate that cannabis is still on consumers’ shopping lists, even as inflation hurts their wallets. But pot growers will struggle to match the impressive pricing power of other sinful stocks like tobacco.
The US cannabis market has seen downturns before, but never as a legal industry. Colorado, the first state to allow cannabis sales for adults, only launched in 2014. If marijuana companies can show that demand for their products is as stable and reliable as for tobacco or l alcohol in a recession, stock prices could get a much-needed rise. The AdvisorShares Pure Cannabis ETF which tracks a basket of U.S. pot stocks is down 53% this year compared to the flat performance of the S&P Consumer Staples Index.