Cannabis Stocks’ Roller Coaster Week
Cannabis Gains Attention
Shares of several cannabis companies fell yesterday after seeing significant gains early in the week. Tilray’s (TLRY) stock price tumbled nearly 50% yesterday after gaining more than 40% during the first part of the week. Shares of Aphria (APHA), Aurora Cannabis (ACB), and Canopy Growth (CGC) experienced a similar rise and fall.
Investors’ Reasons for Backing Cannabis
Retail investors have been interested in the upcoming merger between Tilray and Aphria. This combination, which was announced in December, will create the largest marijuana company in the world by revenue.
Some investors are also speculating that the Biden administration could make federal regulations about marijuana less stringent. This could give the entire industry a boost in the US.
Pot stocks also gained attention from retail investors because of their high short-interest ratios. This metric tracks how many of a company’s shares are being used to bet against it.
Some analysts say the drop in the price of cannabis stocks yesterday shows that the rally was not tied to fundamentals. Retail traders as well as leaders in the cannabis industry will be eager to see how these stocks perform in the coming weeks.
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