Weed Stocks
It wasn’t a big earnings announcement or social media hoopla that rekindled investor interest in marijuana stocks. Instead, it was delivered by Vice President Joe Biden.
On Thursday, Biden unveiled broad measures aimed at decriminalizing marijuana.
The announcement provided much-needed comfort to several cannabis equity stocks that had been battered by delayed legislative progress and dismal financial performance. A more permissive government position on recreational marijuana usage might clear the way for dispensary and retail development, giving the sector a much-needed boost.
For numerous names, trading activity for cannabis stocks has skyrocketed at the individual stock level. Is the latest escalation a foreshadowing of more to come?
Tilray Stock: Why is Tilray’s Volume Increasing?
Tilray stock (NASDAQ:TLRY) volume on Friday was roughly five times its 90-day average as traders reacquainted themselves with the erstwhile parabolic runner. Traders rushed to buy inexpensive shares hoping Biden’s changes would spark a recovery.
Tilray provided some fresh news to keep the surge going with its fiscal 2023 Q1 results call. The business posted sales of $153.2 million and a net loss of $0.08 per share, both of which fell short of Wall Street expectations. However, management reaffirmed its adjusted EBITDA target of $70 million to $80 million to reassure investors that the outlook for the next several quarters remained strong.
Canopy Stock: Is Canopy Growth Corporation Extending in the United States?
Canopy Growth Corporation stock (NASDAQ:CGC) joined the cannabis boom, but the gains were fleeting. After rising 22% on Thursday, the stock lost all of its profits and then some on Friday.
Canopy Growth, a Canadian manufacturer of dried flowers, oils, drinks, edibles, and topicals, seemed to be targeted by short sellers, who have been pounding Canopy since it rose over $50 early last year. Because Canopy has little presence in the United States, the Biden announcement has a minimal immediate influence on the company’s financials. Instead, it was grouped with others into a popular compassion play.
That’s not to suggest Canopy won’t have more exposure in the United States in the future. Its ready-to-drink BioSteel beverages will be available at more than 2,000 Walmarts (NYSE:WMT) in 39 states beginning early next year. Even better, BioSteel just became an NHL official hydration partner, providing them league-wide access to essential marketing platforms. These transactions, together with the launch of its Wana and Acreage brands, have the potential to make the United States an increasingly key growth market in 2023 and beyond.
SNDL Stock: What is the Business Model of SNDL?
SNDL stock (NASDAQ:SNDL) saw one of its most active trading weeks since implementing a 1-for-10 reverse split in late July. The erstwhile Sundial rose 23% on Thursday, but like Canopy (and others), it fell sharply the next day.
In addition to its indoor cultivation facility, the company operates approximately 350 retail outlets across Canada that sell liquor and cannabis products. As a result, it is the country’s largest private liquor and cannabis distributor and has developed a self-sufficient business model that does not rely on external cannabis sourcing.
Another reason the cannabis group has fallen so far out of favor with the market is the lack of profitability that affects SNDL and others. For any turnaround to take root, interest in these stocks must persist longer than two days.
Featured Image- Unsplash @ CRYSTALWEED cannabis
Author Okoro Chinedu 
