The last thing the cannabis industry needed was a global recession. But that’s just what’s been served up by the ongoing COVID-19 crisis. Fortunately, even as the broader markets continue their downward momentum, some cannabis stocks are exploding.
Now, viewers might be asking themselves, why are cannabis companies in the green? Shouldn’t they be affected by the crash like almost every other industry? Well, as always, Rich has a theory.
“Some of these cannabis companies are going to benefit hugely from the fact that everyone’s at home,” explains Rich. “Cannabis can still be delivered to your door in many places. So there’s a huge opportunity here.”
Cannabis Stocks Exploding: Canopy Growth (Up 34% This Week)
Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), the once and supposedly future leader of the cannabis space, has gained more than $4.00 since the start of the week. What makes this so remarkable for pot stock investors is that, historically, when CGC does well, so does the rest of the sector.
Just a few weeks ago, Canopy announced its plan to “optimize” business. This plan included laying off 500 employees and shutting down two greenhouses. While this may hurt the company’s public image, it will effectively tighten Canopy’s belt to keep overhead low.
Despite the increase in share price, which indicates investor confidence may be returning, some analysts argue CGC is still significantly overpriced. To earn a more favorable rating, Canopy will likely have to increase sales significantly.
Cannabis Stocks Exploding: HEXO (Up 45.4% Since Tuesday)
HEXO Corp. (TSX:HEXO) (NYSE:HEXO) suffered a sharp decline after market close on Monday, falling 34% as it reopened on Tuesday. This was a result of the company’s announcement that it hadn’t filed certain management results for the last quarter and half-year periods. HEXO merely disclosed that it had incurred significant impairment losses without determining the final amount.
Obviously, this was a bad look for HEXO, but it seems investors didn’t shy away from the stock for very long. Yesterday began a buying frenzy that brought the share price from a low of $0.35 to a high of $0.77. Today, HEXO shares are trading around $0.69.
Cannabis Stocks Exploding: Tilray (Up 16.6% This Week)
At one point, Tilray Inc. (NASDAQ:TLRY) doubled yesterday, from a starting low of $2.55 to a high of $5.09. It didn’t take long for the stock to level off, but it remains up for the week.
The jump in value occurred the same day that analyst Christopher Carey slashed Tilray’s price target from $16 to $2. Investors may have been attracted by this, thinking the stock can at least outperform such a conservative estimate.
As with Canopy, though, Tilray remains a risky play considering its historic losses. The share price has suffered a nearly 98% loss since its all-time high in October 2018.
What do you think of the cannabis stocks exploding this week? Are CGC, HEXO, and TLRY in for continued growth? Or was this a one-time blip? Will COVID-19 actually return some value to the long foresaken sector?
Keep watching RichTV Live for more news, analysis, and stock picks for the cannabis industry and beyond!
Featured image: DepsoitPhotos © [email protected]