(THIS ARTICLE IS COURTESY OF THE MOTLEY FOOL NEWS)
The one reason that sent all these stocks higher
All three of these stocks have something in common: They all stand to benefit from Wednesday’s effective date for legal sales of recreational cannabis product in Canada. Marijuana investors have looked forward to Oct. 17 for a long time, and anticipation that the industry will bring in huge amounts of revenue from the Great White North has driven all three of these stocks higher over the past couple of months.
Some fear that the reality of legal recreational marijuana could prove to be less impressive than what investors expect, and that could lead to sell-offs for these stocks if it proves true. Yet for now, optimism still reigns supreme, and cannabis bulls think that these companies could all have further to climb.
News for cannabis companies
In addition to the broad-based interest in marijuana-related stocks, these three companies had some specific news items that raised awareness:
- Cronos shares gained 19% after the company reported that it had entered into a partnership with a technology institute in Israel, under which researchers will look at the potential use of cannabinoids in support of skin health and to fight skin disorders such as acne and psoriasis.
- Canopy Growth jumped 14% after it said that it will acquire key assets of Colorado-based hemp research company Ebbu in a cash-and-stock deal, with the cash component amounting to less than $20 million but with Canopy giving up a whopping 6.2 million shares to Ebbu, worth about $300 million based on Friday’s close.
- Tilray subsidiary High Park Holdings announced three new brands for the Canadian market, including broad-based Canaca, Quebecois-focused Dubon, and northwestern-targeted Yukon Rove. Additional product lines include the Irisa brand of women’s wellness products, as well as the Goodship and Wallops lines of edible cannabis items. Tilray stock closed up 11.5%.
In the end, all three of these companies will have to prove that they can live up to the lofty expectations of marijuana investors and produce continuing sustainable growth. It’ll take time to see how successful they are at achieving this goal, but for now, shareholders have high hopes that things will go well for the cannabis industry.