Reddit’s WallStreetBets Drives Market Volatility for Cannabis Stocks

Influenced by traders on /r/WallStreetBets, the Reddit-based forum that stirred the stock market last month with the launch of GameStop shares, shares of cannabis companies have seen volatile highs and lows this week, reports Business Insider. On Thursday, Tilray shares fell 48 percent from Wednesday, as did Aphria shares by 33 percent and Aurora and Cronos by 23 percent, while Canopy Growth fell 24 percent.

However, profits at some cannabis companies continue to outpace last month’s gains. Tilray’s shares remained 421% higher Thursday compared to a year ago, the report said. Exchange-traded funds such as Global X Cannabis, ETFMG Alternative Harvest and Amplify Seymour Cannabis were this year’s best performers at Wednesday’s close.

A report on WallStreetBets described cannabis stocks as an “expensive” new scoreboard that has gained notoriety this month for pushing down GameStop shares. According to a CNBC report, the interest in cannabis shares is due in part to high short interest, which measures the proportion of the company’s traded shares used in betting against the company. The report notes that Tilray’s short interest represents 22.5% of shares available for trading.

Some posts on the discussion forums also raise hopes that the Biden administration is considering decriminalizing cannabis at the federal level. Canopy CEO David Klein told investors Tuesday that he expects federal reform later this year. Canopy also reported Tuesday a 12 percent increase in revenue to $152 million in the third quarter of last year, according to Barron’s, which could suggest that at least some of the share gains are not just a byproduct of retailers and WallStreetBets.

Tilray’s CEO, Brendan Kennedy, went a step further by stating that the company expects federal legalization in the United States within the next 12 to 18 months. In December, Tilray announced a merger with Aphria, which upon completion would create the world’s largest cannabis company based on preliminary results. Under the agreement, Aphria shareholders will receive 0.8381 Tilray shares for each ordinary Aphria share, while Tilray owners will retain their shares without adjustment. Some of Aphria’s trading last week may be related to this deal, as traders try to get a piece of Tilray at the current prices of Aphria’s shares.

Earlier this month, Senate Democrats – who have a narrow 50/50 majority, with Vice President Kamala Harris speaking on a tie vote – announced plans for federal reform.

According to a report by the Wall Street Journal, Sundial Growers is the most frequently mentioned cannabis on the forum with about 8,500 mentions, causing the stock to rise 79% on Wednesday and fall 19% on Thursday.


TG Branfalt

reddit stocks,tilray stock,reddit wallstreetbets,gme stock,canopy stock,aurora cannabi stock,mj stock

You May Also Like

Little-Noticed FAA Memo On Marijuana Emerges Amid Local Airport Controversy In Arizona

Despite numerous last-minute concessions to lower the marijuana tax and ensure that the measure would not conflict with the Initiative 65 medical marijuana program, which voters included in the state constitution in a massive vote in November, there was bipartisan…

Elon Musk Thinks CBD Is ‘Fake,’ But Joe Rogan Teaches Him A Lesson

Elon Musk may know a bit more about rockets and electronic machines, but in an interview with podcaster Joe Rogan this week, he revealed a blind spot regarding cannabis, saying he thinks CBD is “fake.” This does not mean that…

Connecticut Governor Unveils Adult-Use Legalization Proposal in Budget Request

After Steven Meland and Jeremy Breton, co-owners of Hotbox Farms, opened the doors to their 2019 clinic in Ontario, Oregon, lines formed, as they did at other clinics in the city. It was 5 a.m. when he heard someone knocking…

Everything you need to know about the PAX Era Life

It is rare that a West Coast bowler is not already familiar with the PAX brand. The portable, pocket-sized dye and oil sprays are ubiquitous among dedicated users of hunting extracts, and the brand’s patented patterns remain relevant today. Today,…