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U.S. pot stocks are doing much better
Unlike in Canada, where marijuana has been legal nationwide since October 2018, new markets are continuing to pop up in the U.S., and that is making it easier for cannabis companies to expand and boost their top lines.
Multistate operator Trulieve Cannabis (OTC:TCNNF) is coming off an impressive 2020 in which its revenue of $521.5 million grew 106%. And the company is still expanding into new markets, including Massachusetts, where it recently obtained approval to begin growing plants at its facility in Holyoke.
But the industry also has a dark side, according to Tilray (NASDAQ:TLRY) CEO Brendan Kennedy. In a telephone interview with MarketWatch, Kennedy suggested that marijuana companies essentially lied to investors, and each other, about how much cannabis they could produce to support inflated market valuations.
Cannabis stocks were mostly higher Tuesday, as investors digested Tilray Inc.’s earnings and the latest moves by New Jersey and Pennsylvania to pave the way toward legalization.
Tilray TLRY, -2.88% said late Monday quarterly sales grew to $15.5 million, up from $5.1 million in the year-ago period, topping the $14.1 million FactSet consensus. Tilray said the average net selling price per gram of pot increased to $7.52 from $7.13 in the year-ago quarter.
- New Jersey legislators joined Democratic Governor Phil Murphy in announcing Tuesday a bill that would allow adult-use marijuana in the Garden State.
- The announcement included an outline of proposed taxes and an "expedited expungement process" for individuals convicted of low-level marijuana offenses.
- Many of the largest cannabis companies in the world rallied Tuesday following the announcement from the Democratic governor.
The U.S.-listed stocks of Canadian producers (ticker: CGC), (ACB), and (TLRY) are sinking. Since Monday, when Aurora reported a 333% sales jump from its year-ago quarter, its New York Stock Exchange–listed stock has slipped 18%, to US$6.16.
Investors interested in marijuana stocks are breathing sighs of relief that October is over. Most marijuana stocks took a beating during the month. The biggest marijuana stock winner so far this year, Tilray (), saw its share price .
Weed stocks were sliding from their post-election peaks Thursday as worries surfaced that the successor to former Attorney General Jeff Sessions could also be against legal marijuana.
Pot stocks rallied on Wednesday, with Tilray surging more than 30%, after Michigan became the 10th US state to legalize marijuana and as Jeff Sessions, a long-term opponent of legal weed, resigned as the US's attorney general. In January, Sessions rescinded an Obama-era policy directing states to make their own decisions on cannabis without federal.
Canadian pot company Tilray rallied 30 percent on news that U.S. Attorney Jeff Sessions would step down.
Already lifted by midterm ballot measure victories, Tilray and other cannabis companies rose further on word Sessions had resigned. The nation's top law enforcer last January said he would work to revoke policy from the Obama administration that let states make their own rules on weed without hindrance from the federal government.
Canopy Growth and Aurora Cannabis, two other publicly traded Canadian pot companies, both rallied more than 8 percent.
The three Canadian marijuana stocks that currently trade on major U.S. stock exchanges enjoyed big gains on Monday. Shares of Canopy Growth () were up 14% as of 3:48 p.m.
"The marijuana and cannabis industry — sometimes referred to as the Wild West of investing — is littered with high-flyers, potentially over-valued companies, and even scams," the stock brokerage firm said in a three-minute video posted on its Youtube account.
Young traders have flocked to stock trading apps from companies like Robinhood and TD Ameritrade to cash in on the hype around marijuana stocks.