Cannabis stocks rose Wednesday due to strong financial results, new deals, improved opportunities for legalization and attention from the online messaging platform Reddit.
ETFMG alternative harvest ETF (MJ) – Request report, the largest cannabis ETF, increased 9.4% at last check
Tilray (TLRY) – Request report, which unveiled an agreement with British colleague Grow Pharma to import and distribute medicinal cannabis products in the UK, rose by 30.7%.
In December Tilray and Aphria (HERE) – Request report has announced plans to join forces in an all-stock deal to create the world’s largest marijuana manufacturing and distribution company.
Canopy growth (CGC) – Request report rose 4.4%, a day after the company posted fiscal third-quarter revenue that exceeded analyst forecasts. The report came amid a rebound in demand for pot and pot infused drink and vape products, even as the company generated a larger loss per share.
Aurora Cannabis (ACB) – Request report, which is scheduled to report earnings Thursday, was up 11.8% and Sundial Growers (SNDL) – Request report jumped 38%.
Last week, Jazz Pharmaceuticals (JAZZ) – Request report said the company bought cannabinoid therapeutics company GW Pharmaceuticals (GWPH) – Request report for $ 7.2 billion in cash and stock.
How to trade in Jazz Pharma after GW acquisition
The activity in the cannabis sector has caught the attention of traders on Reddit.
The messaging platform has crisscrossed the market in recent weeks, as private investors gathered around companies like GameStop (GME) – Request report, AMC Entertainment (AMC) – Request report, and Inovio Pharmaceuticals (INO) – Request report.
“The marijuana industry will be a $ 1T industry in 10 years’ time when Europe and Asia are open,” a Reddit poster stated. “There will be a few $ 100 billion + companies, and I bet Aphria / Tilray will lead the way.”
Another poster, claiming to be a long-time investor with Tilray and Aphria, (HERE) – Request report added that “with the stupid stuff happening in the marketplace, I still have a premise where the valuation would go insane.”
“Seriously here, I’m super bullish, but $ 50 + is starting to get a little crazy and when it comes to that I’ll probably start expanding,” the poster said. “Market is going crazy and it hits $ 100? I’m out lol.”
In addition, many pot investors are optimistic that the substance could be legalized at the federal level by a Democratic president, Joe Biden, and a Democratic Congress.
Canopy Growth Chief Executive David Klein said during the company’s quarterly conference call that with Democrats controlling the White House and both chambers of Congress, “we expect significant cannabis reform to take place during this Congress.”
Klein noted that last week, several Democratic senators said, “The Senate is determined to introduce and pass strong cannabis reform legislation.”
Earlier this month, Senate leader Chuck Schumer and two other Democratic senators said they would push for sweeping legislation to end the federal ban on marijuana this year.
“We expect this legislation will include comprehensive reforms to ensure restorative justice, protect public health and introduce responsible taxation, while ending cannabis prohibition,” Klein said.