Spikes In Cannabis Sales During COVID-19 Crisis Boosting Pot Stocks
Investing.com | Mar 24, 2020 09:22
Let’s start with a quick quiz. What do toilet paper and marijuana have in common?
It turns out, in a crisis, people want to hoard both.
Yes, as the economy crashes, pot stocks — at least a few of them — are showing signs of a little upswing as individuals who are ordered to stay home or opt to self-isolate feel the need to stock up. The result is marijuana sales have ratcheted up in the last week.
In addition, provincial governments in Canada and state officials in the U.S. where the weed is legal have deemed the substance an essential, which means that even in jurisdictions with the tightest lockdown protocols, cannabis stores can stay open.
h2 Marijuana Sales Spike/h2Late last week, as the threat of COVID-19 intensified across North America and the sale of marijuana was spiking, Bank of America analyst Chris Carey commented that the cannabis sector could provide investors with a defensive move in a market downturn.
Carey pointed more specifically to Aphria (NYSE:APHA), (TSX:APHA), boosting its rating to a ‘buy,’ and reportedly explaining, according to BNN Bloomberg, that the Ontario-based grower could see its market share in Canada increase.
“Our checks across North America were consistent. Regardless of region, cannabis purchases have accelerated," Carey said in a note to investors.
At the end of last week, Aphria's shares moved from a low of US$1.97 (C$2.88) on Wednesday, March 18, to hit US$2.72 (C$3.89) on Friday. They closed last week at US$2.51 (C$3.58) and gained slightly more yesterday to end the day at US$2.54 (C$3.72).
h2 Tilray Stock Rises/h2Aphria was not the only pot stock to gain ground last week. Tilray (NASDAQ:TLRY) shares also rose. They more than doubled from March 19 to March 20, going from a low of US$2.56 at the open last Thursday to hit a high for the week at US$5.03. The stock closed yesterday at US$3.85.
Shares of Charlotte's Web (OTC:CWBHF), (TSX:CWEB), one of the world’s largest CBD oil extractors, gained more than 5% on Monday after announcing it would merge with Abacus Health Products (OTC:ABAHF), (CSE:ABCS), a Toronto-based firm specializing in over-the-counter pain and therapeutic skincare products made with CBD cannabinoid extracts. The shares closed at US$3.52 on the U.S. market, and C$5.10 in Toronto.
Get The App
The US$68.2-million (C$99-million) creates the world’s largest vertically integrated hemp-derived CBD company.
Under the terms of the deal, Abacus shareholders will receive 0.85 of a common share of Charlotte’s Web for each Abacus share they hold. The new venture will have a 35% share of the U.S. CBD market, the companies claim, according to a joint statement issued Monday.
Shares of Abacus gained more than 21.5% Monday to close at US$2.41 on the U.S. OTC markets, while on the Canadian stock exchange the shares rose about 22.8% to end the day at C$3.50.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.