Cannabis stocks don’t always follow in forecasters’ footsteps

Find out how investors fared over the week in some high-profile weed companies

cannabis stocks

The Motley Fool included five Canadian licensed producers, including Canopy Growth Corporation, on a list of 10 recommended pot stocks. Next Green Wave / Unsplash

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This week, investment media outlets offered plenty of hope for owners of Canadian cannabis stocks.

The Motley Fool, for example, published a story listing 10 pot stocks whose sales are expected to rise by 60 percent or more in 2021.

Toronto-based Cronos Group topped the list. The Motley Fool featured other Canadian companies, including MediPharm Labs, HEXO, Organigram Holdings, and Canopy Growth, as excellent cannabis stocks.

Meanwhile, Investopedia columnist Todd Harrison cited several factors that he believes will propel the weed sector forward.

Firstly, presumptive Democratic presidential nominee Joe Biden pledged to decriminalize cannabis this month.

Secondly, Harrison noted that Bloomberg Intelligence had recently suggested a positive outcome if New Jersey voters approve a referendum on the adult use of cannabis. According to Bloomberg, this could “potentially unleash a five-state Northeast bloc worth over $7 billion a year in sales”.

Investors in cannabis stocks might then reap a windfall.

Cannabis stocks like Aphria and Cronos Group shine

But what about this week? How well did investors in Canadian cannabis stocks do over the past five days? And was there any relationship between their performance and the recommendations of one of the most popular investment media outlets on the Intenet?

The Motley Fool’s darling among cannabis stocks, Cronos Group, sizzled. Its shares jumped 6.4 percent to close the week at $9.15 in Toronto. As a result, Cronos Group is now worth $3.19 billion.

The biggest player is Canopy Growth, which received a thumbs-up from the investment media outlet. Canopy Growth shares rose 3.5 percent this week to close at $24.37 in Toronto.

As a result, the Smith Falls–based corporation’s market value crossed $9 billion.

Shares in another big player, Aurora Cannabis, went in the opposite direction. Investors in the Edmonton-based company lost 1.6 percent over five days, closing at $16,16 in Toronto.

Today, Aurora Cannabis is worth $1.82 billion.

But the real dog among larger companies was Tilray. The Nanaimo-based weed company’s shares plunged 7.9 percent over the week, closing at US$7.33 on the NASDAQ exchange.

Tilray was worth US$1 billion last week. This week, the investment community values it at only US$915.24 million.

The Motley Fool didn’t include Aphria Inc. on its list of favoured cannabis stocks. But that didn’t prevent the Leamington-based licensed producer from steamrolling ahead.

Aphria shares shot up by 14.7 percent to close the week at $6.93 in Toronto.

And how did Ottawa-based HEXO do? Despite the Motley Fool’s encouraging words, HEXO shares fell 5.2 percent on the New York Stock Exchange. They’re now available for US$0.73.

HEXO is worth US$287.4 million. It has a long way to go before it will become as valuable as other cannabis companies mentioned in this article.

And even though the Motley Fool may turn out to be right over the long term, following its recommendations didn’t necessarily help investors this week.

Charlie Smith

I'm the editor of the Georgia Straight newspaper in Vancouver, as well as a CannCentral contributor.

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