Cannabis Stocks Continue To Rally As Marijuana Market Recovery Signals Return To Status Quo
Cannabis stocks rose sharply on Monday as marijuana markets placed last week’s Justice Department shenanigans squarely in their rearview mirror. While Wall Street’s hoi polloi kept a keen focus on last Thursday’s panic, seasoned cannabis investors mostly ignored the new normal in favor of the status quo. Seizing their time in the spotlight, experts derided the marijuana market as speculative on Monday, a seeming trend among the fortune-tellers on the exchange. Still, Nasdaq’s best continued to ignore the market correction while cannabis stocks pared their losses, a sign that steady fundamentals and public opinion are on their side. The North American Marijuana Index continued to rise on Monday, as did all major green indices, and the market’s most significant funds rallied yet again. A mixed day on the broader exchanges did not affect the cannabis industry, as legalization efforts in the U.S. and Canada continue to push cannabis stocks to new heights. Mad money men may consider cannabis to be a speculative market - and it is true that volatility does exist - but smart investors understand the signs of an industry on the rise. The fundamentals of the marijuana market are stronger than expected, considering the circumstance, with volatility weeding its way out.
Around The Markets
For the second trading day in a row, it was a mixed day on the broader markets, with Wall Street and the Canadian exchanges both seeing varied results. Following last week’s record numbers on Wall Street, what gains Monday saw were minimal at best, mostly due to the looming quarterly earnings season which kept many investors cautious. The S&P 500 continued to rise, gaining .17 percent to close out Monday at 2,747.71, with similar news on the Nasdaq. Conversely, The Dow Jones Industrial Average fell on Monday, losing .05 percent to close the day at 25,283.00. In Canada, the S&P/TSX continued its decline from Friday, despite gains from cannabis’ big three, Canopy Growth (TSX:WEED), Aurora Cannabis (TSX:ACB) and Aphria Inc. (TSX:APH). The benchmark Index fell 31.79 points closing the day at 16,317.65
The Cannabis Stock Index
Solactive North American Medical Marijuana Index
The North American Marijuana Index
There was no speculation on Monday as The North American Marijuana Index brushed off last week’s losses to rise again on Monday. Investors on both sides of the border help MJIC’s Index gain on Monday as they struck a defiant tone against both the Justice Department and the naysayers on Wall Street calling out cannabis stocks. Recreational marijuana in California is still a significant factor on the Index, much to Jeff Sessions chagrin, as is it in Canada where plans to legalize the drug are still moving ahead on pace for the summer. The North American Marijuana Index closed at 358.93 on Monday, up 26.76 points or 8.06 percent. In the U.S. where investors were the most hesitant in recent months, The United States Marijuana Index rose 7.52 points, an 8.12 percent gain. Canada kept pace, gaining 77.25 points for an 8.09 percent gain. The Canadian Marijuana Index closed out Monday at 1032.25.
Horizon ETF (HMMJ)
One of the most popular funds in the sector, Horizon’s Marijuana Life Sciences Index ETF also saw significant gains on Monday, completely erasing any losses from last week following the Justice Department’s announcement. The fund gained $2.07 for a 9.36 percent increase to close out the day at $24.18.
ETFMG Alternative Harvest ETF (MJX)
Marijuana’s rookie fund has investors excited, especially considering it is the United States first cannabis-related fund available. The fund gained $ 1.97 for a 5.40 percent increase to close the trading day at $38.42.
Winners and Losers
There were some new names in the winner’s circle on Monday, starting with Cronos Group Inc. (TSXV:MJN) (OTC:PRMCF). The company, who announced this week an investment from Fabian Thylmann in their German partner Cannamedical, saw share prices climb 29.13 percent on higher than average trading volume. They closed the day at $10.95 per share. Canopy Growth Corporation (TSX:WEED) closed Monday at $32.11 per share after gaining 17.23 percent on higher than average trading volume. Finally, Kush Bottles, Inc. (OTC:KSHB) had a big day on Monday. The company gained 11.19 percent on higher than average trading volume. They ended Monday at $4.67 per share.
On the other side of the market, Affinor Growers, Inc. (CSE:AFI) (OTC:RSSFF) fell 10.00 percent on Monday on higher than average trading volume. The company ended Monday at $0.18 per share. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), who was recently upgraded by Wells Fargo, saw share prices fall on Monday. The company lost 5.97 percent on higher than average trading volume, closing out the day at $38.40 per share. Rounding out the bottom of the market on Monday was Insys Therapeutics Inc. (NASDAQ:INSY), who ended the day at $10.18 per share after losing 4.86 percent on higher than average trading volume.
Stocks to Watch (And Watch Out For)
MYM Nutraceuticals Inc. (CSE:MYM) announced they acquired Budly Software Inc. last week, who some consider to be the “Uber of Cannabis.” The company fell 1.46 percent on Monday to close at $4.05 per share.
CLS Holdings USA, Inc. (OTCQB:CLSH) had some strong words for Jeff Sessions on Monday. The company was up 4.93 percent on Monday on higher than average trading volume to close the day at $0.745 per share.