The Marijuana News Today
In what is a surprising turnaround, the marijuana news today features a pot stock market on the mend after two days of horrible losses.
We’re seeing a general stabilization of marijuana stocks across the board. Some—mainly marijuana penny stocks—have rebounded quite nicely, with three-to-five-percent gains. Others are stagnant, with little movement at all, while others are in the red for another day.
But overall, this is a welcome respite from the precipitous drops to start the week.
I still believe that we’re ultimately going to enter a prolonged period of a correction, but whether that lasts a couple weeks or several months is still to be determined.
What I imagine will follow now will be several weeks of fairly muted losses or gains, with some marijuana stocks faring better than others compared to industry-wide peaks and troughs.
The marijuana industry, as always, is still reliant on breaking news headlines to help drive share prices. So this could all change in an instant should another investment deal be announced or some other eye-catching headline totally changes the short-term trajectory of marijuana stocks.
As it stands now, however, I predict at least three weeks of stagnation without any substantial gains, but I believe that the period following this correction will see marijuana stocks begin too once again see substantive growth.
Our “Marijuana News Today” articles have been so focused on the market-wide downturn that we were unable to explore in depth on what would have otherwise been a massive development: Aurora Cannabis Inc (NYSE:ACB) listing on the New York Stock Exchange (NYSE).
This is a huge move for a company that has long sought to challenge Canopy Growth Corp (NYSE:CGC) for top dog status in the marijuana industry. Joining it on the NYSE is a power play that furthers that goal.
The main difference between the two stocks being, of course, the price. CGC stock stands at around $40.00 per share, while ACB stock sits around $8.00. Being the only two marijuana stocks on the NYSE, many investors looking for a cheaper way into the marijuana market may turn to Aurora’s lower-valued shares.
Aurora stock also climbed about four percent this morning before tumbling back to down to even.
The stagnation in the market is something that, as I said earlier, I expect will hang around the market for a few weeks. But when it does eventually lift, ACB stock will be well suited to take advantage of the next marijuana rush due to its newfound position on the NYSE.
One marijuana stock that has continued its downward spiral is Tilray Inc (NASDAQ:TLRY).
With its performance being very much hype-based, I expect to see TLRY stock suffer in corrections more than other companies. That is the nature of the beast when a stock grows exponentially without really having necessarily earned those massive gains.
Tilray stock dropped about two percent to start the day, and could very well recover by day’s end, considering the swings we’re seeing in the marijuana stock market.
Still, it has a long way to go if it wants to once again be known as the most exciting marijuana stock in the industry.
You see, being the first marijuana company to IPO on the Nasdaq helped spur astronomical growth in the near-term, but left Tilray stock with little room to grow from here.
Couple that with a waning investor interest in the next few weeks, and I anticipate that Tilray will be one of the harder hit in the correction.
Stepping aside from Tilray, we have a company I’m very much bullish on: Hexo Corp (OTCMKTS:HYYDF, TSE:HEXO).
The beautiful thing about Hexo stock is that it is a marijuana penny stock that has so many qualities of the larger players in the industry.
Supply agreements? Check. A deal with a major alcohol producer to create cannabis-infused beverages? Check. A strong presence in the newly legalized Canadian marijuana market? Check.
There’s so much to like about Hexo stock. And given its relatively small size, I anticipate that its bounce back from this recent correction will be faster than most.
Even today, the company was able to claw back over four percent in early-morning trading.
Several other marijuana penny stocks also rose at about that rate, speaking to the increased flexibility in these cheaper shares. Unfortunately for Hexo and those other stocks, those gains were short-lived as the market took a downturn around noon.
Still, I have high hopes for Hexo Corp in the future.
ACB, TLRY & HYYDF Stock Performances
The ACB stock (black line), TLRY stock (blue line), and HYYDF stock (red line) performances from the past week are seen in the chart below:
Chart courtesy of StockCharts.com
The pot industry is not out of the woods yet, even if the marijuana news today is much better than it had been in earlier weeks.
I still foresee a general stalling in the marijuana stock market as a delayed reaction to the massive gains in August. If history is anything to go by, then that is what will play out in the coming weeks.
But for long-term investors, there’s nothing to fear. This correction will only pave the way for stronger gains down the line, and I anticipate that the next marijuana rush is just around the corner as many outside industries like “big alcohol” and “big tobacco” are poking around, looking to make a buy. When such an event happens, expect to see a surge in prices.