What happens to cannabis stocks and why? | R Blog RU



The medical and recreational cannabis industry is gaining incredible momentum. The names of companies such as Canopy Growth, Tilray, OrganiGram Holdings, Aphria, Aurora Cannabis and HEXO are increasingly being heard in the information field. Let’s find out more about the development of this segment.

Glorious days for marijuana growers

On February 9, the value of securities of the Canadian cannabis industry representative Canopy Growth (NASDAQ: CGC) increased by 11.9%, from $ 43.87 to $ 49.09. The next day, the stock added another 6.27% to a record high of $ 52.17.

On Monday, Tilray (NASDAQ: TLRY) soared by 16.99% to $ 30.09, on Tuesday by 40.74% to $ 42.35, and on Wednesday by 50.91% to $ 63.91. During the same days, OrganiGram Holdings (NASDAQ: OGI) shares gained 156.4%, from $ 2.34 to $ 6.

Aphria (NASDAQ: APHA) gained 57.77% from February 8-10, from $ 16.67 to $ 26.3. During the same period, shares of Aurora Cannabis (NYSE: ACB) also gained in price – by 47.81%, from $ 12.8 to $ 18.92. HEXO (NYSE: HEXO) quotes for Monday – Wednesday increased by 31.8%, from $ 7.8 to $ 10.28.

How much have cannabis shares have risen in the past four weeks? What’s going on in this market? How will the quotes of cannabis companies behave next? Interested in the answers to these questions – be sure to watch our new video.

Individual and Common Causes of Rapid Takeoff

  • Canopy Growth jumped amid strong quarterly earnings. From October to December 2020, revenue was $ 169.9 million, showing an increase of 25% compared to statistics for the same months of 2019. The firm remains unprofitable, but announced its forecast of income in a year.
  • The rise in the price of Tilray shares was caused by the news of the deal with the British cannabis company Grow Pharma. Under the agreement, the Canadian marijuana grower will import its products into the Kingdom.
  • Joe Biden became president of the United States, and his party members gained control of the House of Representatives, the Senate and the executive branch. Recall, the Democrats in the election program promised to decriminalize marijuana at the federal level.

Abrupt course change

On Thursday, February 11, the shares of all the above-mentioned marijuana growers collapsed: Canopy Growth – 22.08%, Tilray – 49.68%, OrganiGram Holdings – 38.83%, Aphria – 35.82%, Aurora Cannabis – by 23.52% and HEXO – by 24.51%.

Analysts speculate that the fall was most likely caused by the actions of retail investors with Reddit. They pumped up prices by buying paper, and now they are staging a sale by crashing the market.

Summing up the result

Marijuana growers have shown incredible gains this week. This phenomenon had both company-specific and industry-wide reasons.

Investors are waiting for Democrats to deliver on their campaign promises and legalize marijuana across the country. In addition, subscribers to the WallStreetBets subreddit continue to influence the stock market. At the beginning of the week, they provoked a rise in the price of securities of the representatives of the sector under discussion, and yesterday they collapsed it.

How do you feel about this industry and do you believe in the legalization of the product in the States?


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