Cannabis companies are a high-wire act with lofty market valuations, while the reality is less bright

Investors will scrutinize Canada’s high-flying cannabis companies this spring as the fledgling industry delivers its latest quarterly results – and those who fall short of expectations could face a tough reaction.

Analysts say it was likely a hard quarter. Cowen and Co., which is bullish on cannabis, suggested there would be a slow start for the sector this year. Scotiabank declared that expectations are “too optimistic” and predicted stock of companies that deliver weaker-than-forecast numbers will “trade sharply lower on earnings day.”

Cannabis companies are a high-wire act, with lofty market valuations underpinned by predictions of future financial windfall, while the reality is less bright. Half a year into legalization, investors will parse an array of details on whether companies are delivering, everything from the physical challenges of growing cannabis on a large scale to what it costs to produce the product.

Story continues below advertisement

“People want to

... read more at: