“Wow, wow, wow, wow, wow, wow,” says Rich, lethargically gazing into the seemingly bottomless pit of pot stock despair. Once again, pot stocks have crashed, making for another bad day for cannabis investors
According to the Canadian Marijuana Index, the cannabis industry has hit a record all-time low. The index is sitting at $49.16 right now, a 6.3% decrease since the markets opened this morning and a 13% decrease since the start of the week. These are not the kinds of results analysts wanted—or expected—for October.
“I’m sure it’s difficult for people to have a good day when things are crashing like this in the cannabis sector. If you’re an investor, that is,” says Rich. “A lot of people are selling, that’s for sure. But I ain’t selling a single thing.”
While some pot stocks have been performing admirably amidst the decline, several are in a race to the bottom. Let’s take a look at some of the major decliners in the sector today.
Pot Stocks Declining: HEXO
Before the markets opened today, HEXO Corp. (TSX:HEXO) (NYSE:HEXO) posted its preliminary Q4 financial earnings. While this is often a cause for celebration for cannabis companies—as several have been able to boast becoming revenue-positive recently—this was an anchor tied around HEXO’s neck.
The company’s stock fell off a cliff this morning, dropping from $3.67 to $2.76—that’s nearly 25%—within the first two hours of the market opening. This is a direct result of the fact that HEXO cut its revenue expectations for Q4 nearly in half, from $26 million CAD to approximately $14.5 million.
HEXO founder and CEO Sebastien St-Louis blamed the disappointing returns on under-performing sales. He also added that the company will be changing its sales and operations strategy to turn business around.
Pot Stocks Declining: TGOD
Continuing its downward trajectory from earlier in the week, The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) fell 20% today from $1.43 to 1.14. From the start of the week, it’s down a harrowing 43%.
Yesterday, TGOD announced that it was looking into alternative forms of financing for its facilities in Ontario and Quebec. This is not a shot of confidence for investors, who worry that the company won’t be able to fulfill its supply agreements. There’s also concern that the facilities won’t be production capable by the time cannabis edibles are legally allowed to be sold in Canada.
Pot Stocks Declining: APHA
So far, Aphria Inc (TSX:APHA) (NYSE:APHA) has shed 15% of its share price today, down to $6.04 from $6.95. While it briefly dipped below $6.00, it seems to be rebounding somewhat.
Two days ago, Aleafia Health (TSX:ALEF) (OTCQX:ALEAF) announced it was ending its supply deal with Aphria, leading to the drop in stock price. Reportedly, Aphria hasn’t been able to adequately hold up its end of the deal.
While Aphria was previously considered one of the better-behaving pot stocks in the market, it seems to have succumbed to the turmoil that its contemporaries face.
“It’s not just one or two companies that are down,” explains Rich. “They’re all down. They’re all getting crushed. It’s crazy.”
What do you think? Is this still a buying opportunity, or is it time to get out of the cannabis industry? Let us know what your thoughts are in the comments below.
Featured image: DepositPhotos © Petrovich99