Cannabis stocks go for a bumpy ride after becoming the most recent target of coordinated Reddit open market moves.

A stock market researcher issued a new report highlighting the recent changes in short selling for the cannabis space.


Keep reading to find out more cannabis highlights from the past five days.

Cannabis stocks tumble after seeing Reddit-led rally

The days of unpredictability in the cannabis stock market continued this past week as the sector received the interest of online traders.

The initial rally for leading cannabis names in senior exchanges like Canopy Growth (NASDAQ:CGC,TSX:WEED), Aphria (NASDAQ:APHA,TSX:APHA) and Tilray (NASDAQ:TLRY) ended up dissipating as confusion over US policy impact took over in the discussion surrounding the sentiment of these stocks.

A report from Markets Insider, indicated the popular Reddit forum r/wallstreetbets, in which investors discuss potential trade and market activity, saw an uptick in discussion surrounding the possible gains from betting heavily in cannabis companies. The online discussion was also fuelled by recent comments from cannabis executives surrounding the possible legalization efforts in the US market.

However, while there have been hints about the approach US President Joe Biden’s administration will take towards cannabis policy several experts have told the Investing News Network (INN) the likelihood of sweeping federal legalization is scarce.

Last Wednesday (February 10) proved to be the key day of highs for cannabis names, with many reaching year highs. But then the drops showed up. Bloomberg News reported Tilray saw a drop in value of 50 percent highlighting the volatility still present with the cannabis stock market alongside substantial drops for funds covering the cannabis space.

“I think people need to be more educated about (how) all cannabis stocks aren’t the same,” Dan Ahrens, managing director and chief operating officer at AdvisorShares, which oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the AdvisorShares Pure US Cannabis ETF (ARCA:MSOS), previously told INN about the lack of clarity present for those evaluating the cannabis stock market at times.

Short selling report warns of future squeezes

The impact of the cannabis stocks volatility period also reached the short selling market. According to S3 Analytics, a research group evaluating short selling tactics in the stock market, short interest in cannabis names grew by nearly US$2 billion in the past month as of last Wednesday.

The researchers indicated Canopy Growth was still the largest short from the cannabis names but Tilray was closing in.

“We can see that short sellers have been trimming their positions into the sector’s rally with $1.54 billion of net short covering in the sector for the year,” the report prepared by Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said.

Dusaniwsky warned short squeezes may continue for cannabis names alongside the potential for US cannabis policy changes rises.

“With general sector sentiment very positive we should expect more general short covering as short sellers look for greener pastures elsewhere,” the report said. “But with short sellers already bloodied, full blown short squeezes in many of these stocks should not be a surprise and long shareholders will have a tailwind of buy-to-covers helping drive stock prices even higher.

Cannabis company news

  • Village Farms International (NASDAQ:VFF,TSX:VFF) confirmed to the market a full repayment completion to Emerald Health Therapeutics (TSXV:EMH,OTCQX:EMHTF) for the acquisition of producer Pure Sunfarms, for the remaining shares not owned by Village Farms.
  • Aphria announced the appointment of Denise Faltischek, the company’s chief strategy officer, as the managing director of Aphria Germany also. “We believe the European Union continues to have many robust growth opportunities for Aphria and Germany represents the most sought-after market within those countries,” Faltischek said.
  • Subversive Real Estate Acquisition REIT LP (NEO:SVX.U,OTCQX:SBVRF) informed investors it is on the way to complete its qualifying transaction as it filed preliminary prospectus for the agreed deal with InterCure (TASE:INCR), an Isreali-based cannabis company.
  • Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) reached the mark of 100 cannabis stores under its management across the US cannabis market. “Reaching 100 dispensaries nationwide is a remarkable milestone and Curaleaf is honored to be a trusted source for high-quality cannabis products and education for patients in Florida and communities across the country,” Joe Bayern, CEO of Curaleaf, said.

Don’t forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today its participation in the following investor conferences:

  • Needham 2nd Annual Virtual Cannabis Conference – March 3 rd , 2021 – Management will participate in virtual one-on-one meetings.
  • 33rd Annual Roth Conference – March 15 th -17 th , 2021 – Charlie Bachtell, CEO and Co-Founder, will participate in a Fireside Chat and management will later participate in virtual one-on-one meetings on April 7 th .
  • Stifel Multi-Sector Conference – April 21 st , 2021 – Management will participate in virtual one-on-one meetings.

About Cresco Labs

Keep reading... Show less

Green Thumb Industries, a leading cannabis consumer packaged goods company and owner of Rise™ Dispensaries, is expanding key partnerships and creating scholarships earmarked for those from communities most impacted by the war on drugs as part of its corporate social responsibility program. The scholarships will be granted to a total of four students for programs at the Cleveland School of Cannabis in Ohio and Olive-Harvey College in Illinois. Additionally, Green Thumb will continue its support of Cabrini Green Legal Aid and partner with the North Lawndale Employment Network in Chicago as part of ongoing collaborations that include financial support, volunteerism and awareness initiatives.

Building on the foundation of Green Thumb’s LEAP initiative, which provided pro-bono support for social equity license applicants in Illinois and which will soon offer business incubator resources to newly awarded social equity entrepreneurs, these impactful partnerships mark a critical next step in prioritizing diversity, equity, and inclusion in the cannabis industry.

Keep reading... Show less

All five flavours of the Company’s KOIOS™ nootropic beverage product are now being carried by Jensen’s, a regional supermarket chain operating in the San Diego, Los Angeles, and Palm Springs areas of Southern California. This placement of KOIOS™ follows several other recent placements of the Company’s beverage products in regional supermarket chains across the United States as part of a strategy to passively build market share in specific geographical areas.

Koios Beverage Corp. (CSE: KBEV; OTC: KBEVF) (the “Company” or “Koios”) is pleased to announce that the full range of five flavours of its KOIOS ™ nootropic beverages can now be purchased at all grocery stores operated by Jensen’s Foods (“Jensen’s”), a long-established family-owned grocery chain operating in the San Diego, Los Angeles, and Palm Springs areas of Southern California. In a press release dated February 19, 2021 the Company announced another chain-wide placement of KOIOS ™ nootropic beverages on the west coast of the United States with Market of Choice in Oregon. With this placement of KOIOS ™ in Jensen’s supermarkets, the Company’s beverage products are now carried in approximately 180 retail stores on the west coast, out of a total of more than 4,000 retail stores nationwide.

Keep reading... Show less

 Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) announces that Philip Young, CEO and Director, and Maghsoud Dariani, Chief Science Officer will be presenting on Thursday, February 25th, 2021 at 5:45 pm EST at “The Gold Standard in Psychedelic Investment, Psychedelic Capital Virtual Investment Conference”, a platform showcasing the top companies, latest IPOs, newest opportunities, and deepest industry insights.

As a presenting sponsor, the Company will connect directly with some of the earliest moving investors in the psychedelic industry and reach an audience of 2,000+ investors. Presentations are 30 minutes in length, with 10 minutes allocated to a one-on-one Q&A session with the audience.

Keep reading... Show less

As Canadian operators race to strengthen their positions in the cannabis landscape, are international pursuits outside North America still top of mind?

The role that mergers and acquisitions (M&A) have played in the expansion of Canadian companies across the globe has been monumental for the growth of the cannabis industry. Now the space has reached a critical point as the demands of the US market increase.

Keep reading... Show less