Why Are Cannabis Stocks Still Failing While the Industry Grows?

Why Are Cannabis Stocks So Low in 2025?

The Disconnect: Green Gold Industry, Red-Tinged Portfolios

The U.S. cannabis industry is raking in billions. Legalization has expanded across states, product innovation is peaking, and consumer demand is stronger than ever. Yet, if you look at your cannabis stock portfolio lately, you’re probably seeing red.

You’re not alone. From casual Reddit investors to professional analysts, everyone’s asking:

“How can cannabis be booming while my stocks are tanking?”

Reddit & r/Weedstocks: The Frustration Is Loud and Clear

On message boards like r/Weedstocks, investors vent daily about the stagnation of once-hyped stocks:

• “MSOS is a dumpster fire, and it doesn’t matter how good earnings are.”
• “CURA, GTII, TRUL—flatlined for 2 years while the shops stay packed.”
• “I'm holding bags while dispensaries are opening on every corner. Make it make sense.”

There’s a growing belief that cannabis is one of the most manipulated sectors in the market today.

What’s Holding Back Cannabis Stocks?

1. Federal Illegality & 280E Tax Penalties

Until cannabis is removed from Schedule I, companies can’t deduct normal business expenses. This crushes margins and discourages large institutional investment.

2. No Uplisting to Major Exchanges

Cannabis companies still can't trade on the NASDAQ or NYSE due to federal status. As a result, many remain on the OTC markets, where liquidity is low and volatility is high.

3. Short Selling & Failures to Deliver (FTDs)

Some retail investors believe cannabis stocks are heavily shorted or naked shorted—a view that has gained traction on forums after repeat “fail to deliver” reports surface on tickers like CURLF and CRLBF.

4. Investor Fatigue

Many early retail investors were burned by the 2018–2020 hype cycle. Now, they’re wary—especially after “legalization” headlines fail to move prices meaningfully.

5. Earnings Don't Move the Needle

Even as top MSOs report record-breaking revenue and cash flow, stock prices hardly budge. This disconnect deepens mistrust and drives more selloffs.

Retail Sentiment: “We’re Being Played”

Here’s how one user on r/Weedstocks summed it up:

“They want us retail folks to give up, sell for a loss, and let institutions swoop in when federal reform hits. This whole thing feels rigged.”

And that sentiment is spreading. Many believe the current undervaluation is intentional, a setup for Wall Street to benefit later—while retail absorbs the losses now.

What Might Turn the Tide?

• Rescheduling to Schedule III or descheduling entirely
• Banking reform (SAFE Banking or equivalent)
• Uplisting allowance to major exchanges
• Real institutional support (BlackRock, Vanguard, etc.)
• ETF revitalization (MSOS getting stronger volume)

Until then, many investors are holding long—or walking away altogether.

Conclusion: Green Industry, Red Stocks

The cannabis sector is booming in real life but bleeding on Wall Street. It’s an infuriating paradox for retail investors who believed in the vision and voted with their dollars.

Still, for some, this pain represents opportunity.

Because if reform comes—and Wall Street finally steps in—these undervalued tickers could surge. But the question remains:

Will the retail investors who stuck through the storm still be around to benefit?

Many cannabis companies operate in complex legal environments and face ongoing compliance, pricing, and distribution challenges. Stock prices may not reflect the operational success or revenue growth of these companies, and significant price fluctuations—sometimes unrelated to fundamentals—are common.

Investors should approach cannabis stocks with extreme caution, perform thorough due diligence, and consider consulting a licensed financial advisor before making any investment decisions. Never invest more than you can afford to lose. 

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