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article imageCannabis stocks take a hit in Canadian stock market Wednesday

By Karen Graham     Oct 17, 2018 in Business
As was expected, Canadian marijuana stocks have been the focus of investors as the country enjoys its first full day as the world's second country legalizing recreational marijuana use.
And being that investors are a skittish bunch, it is no wonder that cannabis stocks were beginning a downward slide at the opening bell today. So pot's poor performance this morning is a follow-up to shares sliding on the eve of legalization.
Canopy Growth Corp saw its share prices dip to $66.45, a 3.27 percent drop from Tuesday. while Aphria Inc, trading at $17.72, and Aurora Cannabis, which saw shares fall to $13.85, both were down over 5.0 percent at the opening bell.
Cannabis items for sale are seen on October 16  2018 in a Montreal cannabis store owned by the SQDC ...
Cannabis items for sale are seen on October 16, 2018 in a Montreal cannabis store owned by the SQDC (Quebec Society for Cannabis), a day before the October 17, 2018 legalization of cannabis in Canada
Biggest winners still the producers
Legalization has been a boon to producers across the country, and cannabis growers have seen their company's net worth reach sky-high numbers. And yes, investors in the U.S. are interested, and why not? Canada has shown the world that a G7 nation can move into the modern world - one where most adults approve of the legalization of cannabis.
Canopy Growth is a very good example of what Canadian producers have accomplished. They have seen market capitalization grow 128 percent to $12.2 billion after Constellation Brands - the beverage giant behind Corona beer and Svedka vodka - announced a $4 billion investment in the company recently.
Interestingly, on Tuesday analysts at Benchmark said Canada's recreational cannabis market could reach 10.5 billion Canadian dollars by 2023 - going so far as to suggest that Tilray would continue to lead the pack.
Market Watch
"We expect Tilray to acquire a meaningful share of the Canadian cannabis market based on initial supply agreements and through its first mover advantage in building production scale and strengthening national brands and products across a broad and expanding category," the analyst Mike Hickey said.
Companies to watch in the coming months
The Canadian companies most successful so far have all been producers of medical marijuana, which has been legal in Canada. And the system for the production and distribution of medical pot across Canada is sophisticated and very well planned out.
The thing to watch for, going forward, is which companies will succeed in the recreational market, according to Market Watch. It is pointed out that probably no company will become the "Coca-Cola of pot." And keep an eye out on the quarterly statements.
Every cannabis producer in Canada is supposed to show in their financial statements how much pot is actually grown and how much is actually sold every quarter. And as people will remember, Canadian regulators, are already scrutinizing how pot producers are calculating the per-gram costs, based on reporting from Digital Journal on October 10.
“Licensed cannabis producers often did not provide sufficient information in their financial statements and management’s discussion and analysis (MD&A) for an investor to understand their financial performance,” the Canadian Securities Administrators said in the report.
More about cannabis stocks, energy stocks, canadian stock market, Day 1, legalization of pot
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