Welcome to July. Investors in the cannabis sector would undoubtedly have wanted to turn the page on the calendar to start a new month and move on to the second half of the year trying to leave the last fifteen minutes behind them.
The so-called & # 39; pot stocks & # 39; – which saw some major spikes earlier this year – were the worst performers on both the US and Canadian stock markets in the last quarter, while the sector was running and has to cope with worse-than-expected revenue for continued supply problems. But can the trend be nothing more than the inevitable growth pains of an emerging sector destined to disrupt established industries?
Investors who entered the cannabis sector in search of rapid accelerated growth were able to compare their experience with those who started the cryptocurrency roller coaster. That investment category, which is experiencing renewed interest late after prices resume their rising trend, also sees a number of serious volatilities.
Established, Growing Market
But there is a big difference between the two sectors: the ultimate timeline. The cannabis market already has an established clientele that is ready to expand – and potentially explode – with the next phase of food legalization in Canada and the eventual legalization of recreational weed use in the US
Despite the declines in the last three months, most major cannabis stocks continue to perform well on an annual basis. For those who have looked from the sidelines, this silence may be exactly what they have been waiting for to jump into it.
Q2 & # 39; s Worst Artists
Of the largest cannabis players, CannTrust Holdings Inc (TSX :), (NYSE :), who lost just over 36.5% in the US in the three-month period ending June, was the worst performer in the second quarter from 2019. 30, and just over 37.5% in Canada.
On the New York Stock Exchange, the Ontario-based medical marijuana producer lost nearly $ 3 per share in the last three months and ended Monday at US $ 5.12, while ending up on the Toronto Stock Exchange for CKS on Friday C $ 6.56. Canada Day long weekend, a decrease of around C $ 4 since early April, when it stood at C $ 10.54.
CannTrust Holdings rate card
Other weeds that assaulted in the last quarter were Aphria Inc (TSX :), (NYSE :), which fell by around 30% on both sides, and the Toronto-based Tilray Inc (NASDAQ 🙂 that only on the Nasdaq traded, lost almost 24.5%.
Rounding out the poor performers were Hexo Corp (TSX :), (NYSE :), Aurora Cannabis Inc. (TSX :), (NYSE :), Cronos Group Inc. (TSX :), (NASDAQ 🙂 and Canopy Growth Corp (TSX :), (NYSE :).
Hexo Corp. from Quebec lost 20.5% in the United States and around 22.5% in Canada, while Aurora Cannabis lost nearly 15% from the US stock market and slightly less than 16% on the S&P / TSX composite from April to June . Cronos Group saw its share price fall more than 14% in New York and slightly less than 16% in Toronto in the last three months.
Canopy More Resilient
Given all that downward momentum, Canopy Growth went relatively well through comparison. The largest cannabis company in the world saw its price drop only around 4% in the US and just over 6.5% in Canada between April and the end of June, despite the fact that the company in Ontario reported balloon trips more than four times worse than what analysts expected.
Canopy Growth price chart
Looking at the broader context
Despite the poor result in the last quarter, no one should lose sight of the wider context. Just about all cannabis stocks performed fairly well in the first half of 2019, with the most positive returns, with two exceptions. Here are the percentage changes for each in the first six months of this year:
Aurora Cannabis: + 49.2% in the US, + 44.7% in Canada
Cronos Group: + 40.9% in the US, + 36.4% in Canada
Canopy Growth: + 40.8% in the US, + 34.6% in Canada
Hexo Corp.: blonde19459006 +40.36 in the US, + 34.16% in Canada.
Aphria: + 15.6% in the US, + 13% in Canada
CannTrust Holdings: -2.18% in the US, -7.3 in Canada
Tilray: -32.4% in the US
