Reefer madness has gripped Wall Street.
Investors are craving marijuana stocks as Canada prepares to legalize cannabis in October 2018, leading to giant gains for Canada-based companies listed on U.S. exchanges. Some experts are concerned that the ending will be a buzzkill.
Billions of dollars have poured into the stocks in much of 2018, and investors smell green — money, not leaves — in the air as they consider the opportunities these companies might have as the cannabis market in Canada grows, along with the possibility that the U.S. and other countries could follow suit.
The value of one company, British Columbia-based Tilray, has jumped tenfold since its initial public offering in July 2018. The company had $20 million in sales in 2017, but it’s now worth considerably more than Macy’s or Hasbro. With those huge gains have come extreme swings.
Wednesday, Sept. 19, 2018, was a trip for Tilray stock: After closing at $154 the previous day, it opened at $233 a share, soared to $300, and then plunged to $151 before rallying to close at $214. Trading was halted several times because of that volatility.
For some people on Wall Street, it’s bringing back unpleasant memories.