"There was a lot of optimism and hype a year ago, and finding funding was easy," says Morningstar analyst Kristoffer Inton. "Then the hype and the optimism faded, and the access to capital got harder. Companies have been forced to make tough decisions. They're all holding their breath. They're waiting until the market grows big enough to help generate profit or they find financing to hold themselves over."

Pot stocks are down 39 percent to 80 percent from peak levels set last spring, reflecting the downside of an investor base that's mostly retail buyers, rather than institutional shareholders. It comes at a critical time for the industry in Chicago, which is home to several of the industry's largest players, two of which are trying to complete stock-heavy acquisitions.

At $6.54 per share, Chicago-based Cresco Labs' stock is down 50 percent from its high of $13.21 on April 26. Shares of Green Thumb Industries, also based in Chicago, are down 37 percent at $10.26 each.

When Tempe, Ariz.-based Harvest Health & Recreation announced in April it was planning to acquire Chicago's Verano Holdings in an all-stock deal, Harvest shares were at $6.68 and the deal was valued at $850 million. The stock now trades at $3.01.

Curaleaf, based in Wakefield, Mass., is buying Chicago-based Grassroots Cannabis for $875 million in cash and stock. Curaleaf shares trade at $6.85, or 39 percent below their peak and less than their price of $7.65 when the deal was announced in July. Curaleaf said in a release it expects the deal to close in the spring.

Los Angeles-based MedMen Enterprises, the company hit hardest by the downturn in marijuana stocks, called off its proposed deal with Chicago-based PharmaCann in October. MedMen shares trade at 47 cents a share, down from a high of $3.18 a year ago.

QUIRKS APLENTY

The downturn in cannabis stocks is one of the many quirks of an industry that's in its infancy. Because marijuana is illegal in the U.S., companies such as Cresco and GTI went public in Canada, even though they don't sell weed there. But the Canadian-listed stocks got punished for the rocky start to recreational sales in the Canadian market last year. Illnesses connected to vaping also hurt weed stocks, even though the problems weren't linked to products from cannabis companies, which are heavily regulated.