The glory days for marijuana stocks began in late 2017 and early 2018. Then in September of 2018, the bottom began to fall out of the market for these stocks, and by March of 2020, shares were down as much as 90% compared to prices in July 2018.
The troubles reflected a number of problems for the new industry: too much product and not enough demand, falling prices on the black market where sellers did not pay taxes and a slow-moving Canadian regulatory system that limited retail outlets. Eventually, these problems got sorted out, but shares of the pot growers didn’t begin rising until late November of last year, when it became clear that Joe Biden was going to be the new U.S. president.
Biden’s election, and the election of two Democrats from Georgia to the U.S. Senate in January, gave the industry (and shareholders) hope that the U.S. listing of marijuana as a dangerous drug would be removed and that cannabis sales would become legal throughout the United States.
That hope is helping push pot stocks to recent highs, but they’re still a long way from their peaks of 2018. Here is how six top cannabis stocks have performed since August of 2018:
Of these stocks, Tilray has created the most noise in the past few days. Shares shot up more than 50% on Wednesday following the company’s announcement that it had signed a deal to become the sole provider of medicinal marijuana in the United Kingdom.
There was, however, an additional factor in the mix. Retail investors who follow Reddit’s r/wallstreetbets jumped on the stock as well. Some were attracted by the U.K. deal and others were probably attracted by the short interest in the industry. According to data from