Home / Business / Marijuana stocks hit a record low as legal opportunities lower.

Marijuana stocks hit a record low as legal opportunities lower.



Workers inspect marijuana plants inside a growing room at the Aphria Inc. Diamond plant in Leamington, Ontario, Canada on Wednesday, January 13, 2021. Tilray Inc. and Aphria Inc. agreed to merge. Together they became the new giant company in The cannabis industry is rapidly growing.

Annie Sakab | Bloomberg | Getty Images

As for namesake stocks such as Curaleaf Holdings, GrowGeneration and Aurora Cannabis, the trend appears to be down.

As part of the selloff in markets that have destroyed technology and other growth areas over the past few weeks, investors have also dropped cannabis producers and distributors, who performed much better over the course of the month. Outbreak

The AdvisorShares Pure Cannabis ETF, comprised of cannabis-based growers and drug developers, fell 8.5% following last week̵

7;s 9.4% drop, the Amplify Seymour Cannabis ETF, down 20% over the past two weeks, the biggest drop. Since March last year

Most of the leading cannabis companies are based in Canada, where the plant is legal for recreational consumption.As of 2018, the United States has nearly 10 times as many people as Canada, and distributors are waiting for opportunities to expand. Under anxiously

After a while, things will look good.

Weed’s shares rose after Joe Biden was elected president in November and then again in January after Democrats won a majority in the Senate with two victories in Georgia runoff elections Investors cheering on the results, believing Democrats will take action to legalize marijuana at the federal level following a November vote to allow recreational weed in Arizona, Montana, New Jersey and South Dakota They joined the 11 other states that have already enacted the pot laws.

Senate Democrats have promised to enact widespread legislation that will end federal prohibition on marijuana and end the war on drugs.

“Ending the federal marijuana ban is necessary to correct the glitch of this failed war and end the decades of damage inflicted on colored communities across the country,” said Chief Minister Chuck Schumer. Much of the Senate of New York was written, along with Zen Cory Booker of New Jersey. And Ron Wyden of Oregon in a statement on Feb. 1.

Where are the Republicans?

But working across the aisle isn’t easy, and Democrats need some Republicans to pass meaningful legislation. If the Covid-19 relief bill is any indication, the chances of bipartisan are dire. It’s not the only Republican Senate to have signed a $ 1.9 trillion package.

Matt Bottomley, an analyst covering the cannabis sector at Canaccord Genuity, addressed the political challenges in a report last month on Canopy Growth, which owns cannabis retailers and brands that produce cannabis-based products. He downgraded to sell after the company’s quarterly results, mainly because “Valuation has increased significantly” since October.

“The sector continues to see the value of the appreciation as a function of the positive macro headlines coming out of the United States. (President Biden; “We are not predicting federal marijuana legalization in the United States anytime soon and believe that the US cannabis legislation will continue to be democratically controlled and committed to pushing US cannabis reforms at the federal level),” Bottomley wrote. CGC value additions towards the end of the year are likely to not experience a consistent base upside at this time. “

Canopy Growth has dropped 19% over the past two weeks.

One of the biggest decliners this week is Aphria, which agreed in December to merge with Tilray in what would be the largest cannabis company by revenue.Aphria, which produces medicinal and recreational cannabis, dropped 13. % After a 11% drop in the last week It was the worst performance in two weeks for stocks since a four-week plunge between February and March of last year.

Irwin Simon, Aphria’s CEO, told CNBC last month that he expects marijuana to be legal in the United States within the next few years. But it said it could happen sooner in places like Germany and Portugal.

“There’s a lot I don’t know about what’s going to happen in the United States. But we have a balance sheet, we have knowledge, we have brands, we have technology that can make big money. The impact when the legalization takes place, ”Simon said Feb. 24 in” Closing Bell. “” I say it’s completely legal for the next couple of years. “

Shares of Tilray, a crop research and distribution company, were down 12 percent this week following last week’s 17 percent drop.

The slump affected the entire industry.

Healthcare products provider Curaleaf was down 12% in two weeks, while GrowGeneration Online stores for the growing device dropped 31 percent and Aurora Cannabis, a cannabinoid carrier, dropped more than 20 percent.

see: Pot stocks slide on volatility caused by recent round of Reddit.


Source link