Cannabis stocks finally received a break from what has been a long bear run in the markets. With stock prices of marijuana companies falling across the board last month in the biggest monthly decline for the year, cannabis stocks continued to fall in the early days of June as the FDA concluded a hearing on CBD with mixed results. However, stocks finally recovered a little bit today on a variety of news.
Both cannabis stock indexes, the ETFMG Alternative Harvest ETF and The Horizons Marijuana Life Sciences ETF, were up significantly in Tuesday’s trading session, shooting up 5 percent and 4.4 percent respectively. Both indexes were down over 10 percent over the past five trading days.
As it turns out, the Dow Jones Industrial Average and other major indexes also fell significantly during the past few trading days as well, falling 766 points over that same time period before shooting up 458 points today.
The surge comes as a relief to cannabis traders, who were hit be further declines on Monday. The selloff, which began as early as Thursday in anticipation of the FDA hearing on CBD as an ingredient and its future legality, followed through on Monday as the agency ended up with mixed opinions on the compound. However, the FDA did mention that they would seek alternative pathways to legalization due to the public interest in CBD.
Green Growth Brands (CNSX: GGB) was one of the biggest winners in Tuesday, shooting up around 12 percent on the day as it secured a $55 million acquisition with a Florida based dispensary chain. Considering how lucrative the Florida market is with it’s growing medical patient population coupled with a relatively small number of competitors and dispensaries already in place, investors were very impressed with this piece of news.
Another major winner today came from Aurora Cannabis (TSE: ACB)(NYSE: ACB), which shot up almost 10 percent in one day. Analysts have said that the recent dip in the company’s stock price was a good buying opportunity, a decision that seems to have paid off with Tuesday’s gains.
“Aurora is getting close to having all the pieces it has built or acquired coming together, and that aligns with its production capacity soaring and demand for medical cannabis increasing at a solid pace around the world,” wrote Ben Mahaney according to Yahoo Finance. “It’s only a matter of time until Aurora permanently breaks out, and when it does, I think it’s going to catch a lot of the naysayers by surprise because of their focus on recreational pot at the expense of the much more lucrative and longer-lasting medical cannabis market.”
Other major stocks that surged upwards included Tilray (NASDAQ: TLRY), Cronos Group (TSE: CRON)(NASDAQ: CRON), Aphria (TSE: APHA)(NYSE: APHA), and Canopy Growth Corp (TSE: WEED)(NYSE: CGC), which all jumped 5.3 percent, 6.2 percent, 7.8 percent, and 5.9 percent respectively.
Overall, weed stocks have experienced somewhat of a downturn this past month, in comparison to the rapid surge they saw in January. Regardless, it’s expected that this slowdown will reverse in the coming future as other major events, such as Canada’s legalization of CBD-edibles, looms on the horizon.
