It's been a dismal 2023 for pot stocks

• Cannabis stocks have had a miserable 2023.
• An index tracking the share price of the sector's 100 largest companies has slumped 14%.
• In comparison, the benchmark S&P 500 has soared 23% year-to-date.

It's been a great year for much of the stock market, with the rise of AI and investors' bets on future Federal Reserve rate cuts powering equities higher.

Pot is one of the few sectors that's missed out on the rally.

Solactive's MJ PurePlay 100 Index, which tracks share prices for the 100 largest publicly-traded marijuana companies, has slumped 14% year-to-date. Those losses mean it's massively lagging behind the benchmark S&P 500, which is up 23% over the same period and closed Friday just 2% short of a fresh all-time high.

Cannabis' rough year has wiped out hundreds of millions of dollars worth of value for shareholders, with Curaleaf and Innovative Industrial - two of the sector's only companies still worth over $1 billion - shedding a combined $370 million in market capitalization year-to-date, by Business Insider's calculations.

The drug is still classed as a Schedule I substance on a federal basis - even though it's been legalized in 24 states, two territories, and Washington DC - which means it holds the same status as heroin, LSD, and ecstasy.

There have been few signs of progress toward federal legalization under President Joe Biden, although pot stocks did rack up their biggest weekly gains in three-and-a-half years back in August after the Drug Enforcement Agency said it would review the drug's Schedule I classification.

Pot's current legal status means that companies that grow and sell the plant are subject to aggressive taxation laws and often have to resort to listing on smaller exchanges. Many of the sector's larger-cap stocks are listed in Canada, rather than on the New York Stock Exchange.