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You're most definitely better off smoking Okanagan-cultivated marijuana right now than investing in it.
"There are a lot of encouraging signs in the cannabis industry," says Vinay Tolia, CEO of Flowr Corp., the company that has a huge indoor grow facility in Kelowna.
"Our sales are soaring as retail stores continue rolling out. But there is certainly a big hangover from the capital markets. Cannabis stocks have been clobbered. I try not to look at our stock right now because it's depressing."
We looked and saw Flowr stock peaked at around $8 when cannabis investments were hyped prior to legalization in October 2018.
Currently, the stock is changing hands at a piddling 50 cents.
"Every cannabis company's stock chart looks the same and it's ugly," says Jerry Jaager of Trade Winz, a firm that leads investment education, including a course at Okanagan College that focused on trading in cannabis in September 2018.
"Stocks went way up during the speculation stage and then plummeted as soon as cannabis was legalized in October 2018. In fact, since legalization, investors have done nothing but lose money on cannabis stocks."
Of course, this is hindsight, but if investors bought cannabis company shares early, enjoyed the exhilarating ride of stock ascension and sold the day before legalization they would be rich right now and laughing all the way to the bank.
While many investors may still be smarting from their losses, some of the same cannabis companies that may have proved bad investments are now in production and doing well selling to the preponderance of private and government stores that retail legal pot.
"We're fully operational at our 85,000-square-foot grow facility in Kelowna with a capacity of 10,000 kilograms a year," says Tolia.
"We're focusing on producing premium flower, particularly our flagship strain of BC Pink Kush, for sale to retail stores in 3.5 gram jars and pre-rolled joints. When investors see how strong our operations are, the stock will go up in the longer term."
Jaager agrees.
"The cannabis industry itself is amazing," says Jaager, who ironically is not a cannabis user.
"Production has ramped up and recreational and medical users are being supplied with legal cannabis. There are and there will be opportunities for investors yet again. But it's more likely to be like a boring bank stock that pays dividends, the kind of stock widows and orphans invest in."
Jaager has already found opportunity.
He bought some Canopy Growth stock during COVID for $14 and later sold it for $26, a tidy profit.
Canopy stock is currently around $22 and had been as high, forgive the pun, as $70 pre-legalization in 2018.
One of the most dramatic cannabis stocks has to be Nanaimo-based Tilray, which started at $10, skyrocketed to more than $300 in mid-2018, and is now back around $10.
Meantime, the Okanagan has more than 30 cannabis stores and has overall become a cannabis hotspot.
Besides Flowr, the Valley is also home to pot growers Doja, THC BioMed and SpeakEasy; cannabis oil extraction companies Everest BioPharma, MediPharm Labs and Valens GroWorks; equipment manufacturer Vitalis Extraction Technology; and True Leaf, which uses the CBD (non-high) portion of the cannabis plant to make supplements, treats and oils for dogs and cats to boost immunity, ease hip and joint pain and reduce anxiety.
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