Cannabis stocks soar—and New York tabloid ties this to study on COVID-19 prevention

The market capitalizations of Aurora, Tilray, Canopy Growth, Aphria, Cronos Group, and Hexo are all sharply higher than they were seven days earlier.

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What a difference seven days can make. In our last weekly report on cannabis stocks, we noted that Canopy Growth Corp had just gone through a roller-coaster ride over the previous five days, closing at $22.33.

By the end of Friday’s (May 22) trading, the Smith Falls, Ontario–based weed producer had shot up 21.4 percent to close at $27.10 on the Toronto Stock Exchange. That lifted its market capitalization to $9.48 billion.

Nanaimo-based Tilray Inc. was also a solid performer, closing the week up 31.3 percent over the previous Friday’s close. Tilray reached US$10.26 on NASDAQ, elevating its market capitalization to US$1.28 billion.

This was particularly welcome news for Tilray shareholders, who saw their stock price fall in the previous week following a disappointing quarterly report.

Canopy Growth Corp. is expected to release its next quarterly report before markets open on Friday (May 29).

The New York Post linked the recent jump in the share price of Canopy Growth Corp. and Tilray to an Alberta research paper, which is raising hopes that pot could play a role in preventing and treating COVID-19.

CannCentral previously covered this April study by University of Lethbridge researchers. It identified 13 promising cannabis sativa extracts that could conceivably block the SARS-CoV2 virus from entering host cells.

“While our most effective extracts require further large-scale validation, our study is crucial for the future analysis of the effects of medical cannabis on COVID-19,” the researchers wrote. “The extracts of our most successful and novel high CBD C. sativa lines, pending further investigation, may become a useful and safe addition to the treatment of COVID-19 as an adjunct therapy.” 

The paper has not been peer-reviewed.

Another licensed weed producer, Edmonton-based Aurora Cannabis Inc., enjoyed a spectacular week on the markets. This was despite a 6.72 percent drop on May 22 to close at $22.48 on the Toronto Stock Exchange.

The shares were still up 44.6 percent over the previous Friday’s close, fuelled by the company’s US$40-million takeover of Massachusetts-based Reliva CBD. Aurora’s market capitalization is up to $2.47 billion.

Aphria Inc. shares climbed 17.9 percent from last week’s close. Now trading at $5.54, that boosted the Leamington, Ontario–based company’s market capitalization to $1.48 billion.

Another winner was Toronto-based Cronos Group Inc., whose shares closed at $9.32, marking a 20 percent rise over the previous week’s close.

And Ottawa-based Hexo Corp. shares rose 18.8 percent above the previous Friday’s close to reach US$0.63 on the New York Stock Exchange.

That’s still not high enough to meet the listing requirement of a share price over US$1. It remains to be seen if Hexo will do a reverse stock split, like Aurora Cannabis chose to do earlier this month, in order to retain its place on Wall Street.

Charlie Smith

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

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