Hedge Fund Veteran Doug Kass Says Most Cannabis Stocks Are ‘Walking Dead,’ But These 4 Names Stand Out
Veteran hedge fund manager Doug Kass isn’t mincing words about the state of the cannabis industry. In a recent column titled “Picking the Cannabis Winners in an Industry Full of the Walking Dead,” the Seabreeze Partners president outlined why he believes most public cannabis companies are distressed and structurally unsound — but also identified a small group he still considers investable.
‘The Walking Dead’ Of Weed Stocks
According to Kass, a majority of cannabis equities today are effectively “walking dead,” their survival contingent on the ability to refinance mounting debt. And even for those that manage to raise capital, significant equity dilution could leave shareholders with little value.
“The cannabis industry now consists of only a handful or two of private and public companies that are healthy and who reside in the land of the living,” Kass wrote. “Most of the other public equities are among the walking dead.”
He argues the industry’s earlier projections for market size, sales and profitability were dramatically overstated, leading to disappointing results and poor investor returns. That disillusionment has been compounded by structural headwinds — oversupply, inconsistent state-level rollouts and sluggish legalization progress — all contributing to weak dispensary unit economics and price compression.
Kass also noted that access to capital has dried up, leading some operators …