The cannabis industry is in the limelight as one of the fastest-growing industries with states legalizing the substance and increasing public acceptance. However, this doesn’t mean every stock is necessarily a good buy. We believe investors are better off avoiding cannabis stocks Canopy Growth (NASDAQ:CGC), Hexo (HEXO (NASDAQ:HEXO)), and Flora Growth (FLGC) because of their weak growth potential and bleak fundamentals. Read on.Cannabis stocks have been quite volatile over the past year. Stocks surged as retail investors piled in and growth stocks outperformed. Then, the sector had another leg higher as Democrats winning the executive and legislative branches made people optimistic about it being legalized at the federal level.
On the other hand, many cannabis producers are struggling as the crop’s price keeps trending lower due to advances in growing technology and increasing yield. Further, there are no barriers to entry.
Given this backdrop, it could be wise to stay away from fundamentally weak cannabis stocks Canopy Growth Corporation (CGC), Hexo Corp. (HEXO), and Flora Growth Corporation (FLGC).