Cannabis shares rose on Wednesday amid strong financial results, new deals, improving the outlook for legalization and attention from the online messaging platform Reddit.
ETFMG Alternative Harvest ETF (MJ) – Get report, the largest cannabis ETF, eventually climbed 9.4%
Tilray (TLRY) – Get report, which unveils an agreement with UK counterpart Grow Pharma to import and distribute medical cannabis products in the UK, rose 30.7%.
In December, Tilray and Aphria (APHA) – Get report has announced plans to join forces in a deal that will create the world’s largest marijuana production and distribution company.
Roof growth (CGC) – Get report rose 4.4%, one day after the company posted third-quarter fiscal revenue that beat analysts’ forecasts. The report comes amid a recovery in demand for pot and pot drinks and vape products, even though the company has generated a larger loss per share.
Aurora Cannabis (ACB) – Get report, which is expected to report revenue on Thursday, rose 11.8% and Sundial Growers (SNDL) – Get report jumped by 38%.
Last week, Jazz Pharmaceuticals (JAZZ) – Get report said they buy the cannabinoid therapeutic company GW Pharmaceuticals (GWPH) – Get report for $ 7.2 billion in cash and inventory.
How to trade Jazz Pharma after GW acquisition
The activity in the cannabis sector has attracted the attention of traders on Reddit.
The messaging platform has been on the market for the past few weeks, while retail investors are chatting about such companies as GameStop (GME) – Get report, AMC Entertainment (AMC) – Get reportand Inovio Pharmaceuticals (I NO) – Get report.
“The marijuana industry will be a $ 1T industry in ten years’ time once Europe and Asia are open,” said one of the Reddit posters. “There will be some $ 100 billion + companies, and my bet is that Aphria / Tilray will take the lead.”
Another poster claiming to have been a longtime investor to Tilray and Aphria, (APHA) – Get report added that “with the stupid things going on in the market, I still have a premise where the valuation would go insane.”
“Seriously here, I’m super bullish but 50 $ + is starting to get a little crazy and if it gets there, I’ll probably start downsizing,” the poster said. “The market is completely nuts and it’s $ 100? I’m lol.”
In addition, many pot investors are optimistic that the substance could be legalized at the federal level by a Democratic president, Joe Biden, and a Democratic congressman.
David Klein, CEO of Canopy Growth, said at the company’s quarterly conference that with the Democrats in control of the White House and both chambers of Congress, “we expect a major cannabis reform to take place during this Congress. “
Klein noted that several Democratic senators said last week that the Senate is committed to enacting powerful legislation on cannabis reform.
Earlier this month, Senate Majority Leader Chuck Schumer and two other Democratic senators said they would push this year to pass comprehensive legislation that would end the federal ban on marijuana.
“We anticipate that this legislation will include comprehensive reform to ensure restorative justice, protect public health and implement responsible taxes while ending the cannabis ban,” Klein said.