Benzinga - by MarketBeat, Benzinga Contributor.
Various themes and sectors garnered buzz and attention as the first quarter drew to a close. However, one industry that has been in a lull for a significant period reignited the imagination and hope of longstanding investors after it finished the first quarter in style.
Over the previous month, several cannabis stocks have surged dramatically, igniting the sector as gains reached high double to even triple-digits in some cases. Cannabis companies like Canopy Growth (NASDAQ: CGC), Tilray (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB) have experienced notable upticks in volume and price, leaving investors at a potential crossroads. Is it time to exercise some caution and take risk-off after the swift and extreme move higher, or should one dive straight into the green gold rush?
Let's examine each of the stocks mentioned above more closely and understand what drove their recent gains.
The Catalyst Behind the Breakout
First, Vice President Kamala Harris reportedly advocated for the legalization of marijuana during a closed-door meeting at the White House in mid-March. She also called for the U.S. Drug Enforcement Administration (DEA) to reschedule marijuana, citing its current classification as a Schedule I drug as "absurd." Since joining the Biden ticket, these comments marked the first time that Harris signaled support for federal legalization, potentially influencing the administration's stance ahead of the presidential election.
Then, and arguably the most significant catalyst, was when Germany passed a law to fully legalize marijuana, effective April 1, allowing possession, home growing, and distribution among social clubs. This news could benefit investors in cannabis stocks like Tilray, Cronos (NASDAQ: CRON), and Canopy Growth, particularly when Germany moves forward with laws to standardize commercial production and retail sales of cannabis.
3 Cannabis Stocks Making Moves
Tilray (NASDAQ: TLRY)
TLRY staged an impressive turnaround in the previous month, with the stock up almost 43%. Interestingly, insiders have purchased stock for the first time in recent years, with insiders buying $183,210.00 of stock in the first quarter of the year. Based on three analyst ratings, Tilray has a Hold rating. Analysts' consensus price target of $2.83 is forecasting a potential upside of close to 15% for the cannabis company.
Canopy Growth (NASDAQ: CGC)
Canopy's recent stock performance has been remarkable, with the stock soaring 162% in the last month. Its volume has also surged to incredible heights, with the stock trading close to 200 million shares over the previous four trading sessions. However, Analysts are bearish on the stock, with a reduced rating and consensus price target predicting close to 44% downside.
Aurora Cannabis (NASDAQ: ACB)
Like the above two names, Aurora's shares garnered substantial attention over the previous month. The stock surged by almost 40% during the last month, with its volume rocketing higher. Sentiment appears overwhelmingly bearish on the name, with a significant short interest of 24.5%, representing 3.8 million shares, as of March 15.
The article "Green Gold Rush: Here's What's Driving Cannabis Stocks Higher" first appeared on MarketBeat.