Cannabis stocks plummet after optimism

by Team Inc.

13-02-2021-Cannabis stocks plummet after optimism

Cannabis stocks plummeted on Thursday. Tilray, Aphria, Aurora Cannabis, Cronos and Canopy Growth all declined due to the wide sell-off. The hype died down on Reddit.

Pot Shares plunged from highs seen earlier in the week as the momentum of loose traders - who banded together on Reddit - died out. Members of the Wall Street Bets Reddit page cheered the stock, as it did with GameStop in January. Now there has been a turnaround.

From boost to big losses cannabis stocks

Tilray led the industry's losses, dropping a whopping 48%. Aphria and Aurora Cannabis were down 33% and 23%, respectively. Cronos was down 23% and Canopy Growth was down 24%. There was much optimism earlier this week as there were hopes that Democrats would soon implement federal decriminalization of cannabis. Canopy CEO David Klein told investors on Tuesday that he expects the Biden government to do this. Tilray's chief executive Brendan Kennedy expected federal legalization to be achieved in the next 12 to 18 months.

The sector got a second boost from Reddit traders during Wednesday trading. Members of the wallstreetbets forum began touting Tilray, Aphria and other cannabis producers to make alien winnings. Posts with massive marijuana stock returns rose to the top of the Reddit page, generating thousands of comments.

By the time the markets closed on Wednesday, several pot stocks were at their highest levels in years. Global X Cannabis, ETFMG Alternative Harvest and Amplify Seymour Cannabis were the best performing ETFs of the year to date. Because many investors have cashed, the shares immediately fell sharply. The weed stocks that plummeted during trading on Thursday remain well above last month's prices. Tilray, for example, is up 421% year-to-date.

Read more markets.businessinsider.com (Source, EN)

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