The sector remains under siege, with its main salvation tied to the possibility of US reforms. But, WEED has already indicated it may have trouble continuing as a going concern. Considering it was once the leader of the sector and worth $25 billion, it has been a pretty disastrous fall from grace. We would expect tax loss selling and solvency concerns to take most of the stocks lower still in the next month or so. We think consolidation needs to continue, as few companies are in profitable positions right now. Demand is nowhere near what was expected a few years ago, and costs have risen. Many continue to bleed cash (WEED had negative cash flow of more than $500M in the past 12 months). We would continue to be very cautious overall towards the sector.
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