Cannabis stocks rose on Wednesday on the back of strong financial results, new agreements, improved legalization prospects, and the attention of online messaging platform Reddit.
ETFMG Alternative Harvest ETF (MJ) – Get the report, the largest cannabis ETF, most recently rose 9.4%
Tilray (TLRY) – Get the report, which revealed an agreement with UK-based Peer Grow Pharma to import and distribute medical cannabis products in the UK, rose 30.7%.
In December, Tilray and Aphria (EXACTLY HERE) – Get the report announced plans to join forces in an all-stock deal that will create the world’s largest marijuana manufacturing and distribution company.
Canopy growth (CGC) – Get the report rose 4.4% a day after the company posted third-quarter revenue that beat analysts’ forecasts. The report took place amid a rebound in demand for pot and pot infused beverages and vape products, despite the company posting a larger loss per share.
Aurora cannabis (ACB) – Get the report, which is expected to show profits on Thursday, rose 11.8% and Sundial Growers (SNDL) – Get the report jumped 38%.
Last week Jazz Pharmaceuticals (JAZZ) – Get the report said it bought cannabinoid therapeutics company GW Pharmaceuticals (GWPH) – Get the report for $ 7.2 billion in cash and stocks.
Trading with Jazz Pharma after the takeover of GW
Activity in the cannabis sector has caught the attention of traders on Reddit.
The news platform has messed up the market in recent weeks, with retail investors gathering around companies like GameStop (GME) – Get the report, AMC Entertainment (AMC) – Get the reportand Inovio Pharmaceuticals (IN O) – Get the report.
“The marijuana industry will be a dollar industry 10 years from now once Europe and Asia are open,” a Reddit poster explained. “There will be a few companies valued at over $ 100 billion, and I’ll bet Aphria / Tilray will lead the way.”
Another poster claiming to be a long-time investor in Tilray and Aphria (EXACTLY HERE) – Get the report added that “with the stupid stuff going on in the market, I still have an exit point where valuation would go crazy.”
“Seriously, I’m super bullish, but $ 50 + is going a little bit crazy and when it gets there I’ll probably start downsizing,” the poster said. “The market is completely insane and hits $ 100? I’m out lol.”
In addition, many top investors are optimistic that the substance could be legalized at the federal level by a Democratic president, Joe Biden, and a Democratic Congress.
David Klein, chief executive of Canopy Growth, said during the company’s quarterly conference call that Democrats, who control the White House and both houses of Congress, “expect major cannabis reform to take place during this Congress.”
Klein noted that several Democratic senators said last week, “The Senate is determined to introduce and pass powerful cannabis reform laws.”
Earlier this month, Senate Majority Leader Chuck Schumer and two other Democratic Senators said they would press for sweeping laws to be passed this year that would end the federal marijuana ban.
“We anticipate that this legislation will include major reforms to ensure restorative justice, protect public health and introduce responsible taxes while the cannabis ban comes to an end,” said Klein.