It’s been an odd few weeks for pot stocks where we’ve seen some big names struggle, while smaller companies have been on the rise.
Canopy Growth Corp (TSX:WEED)(NYSE:CGC) has seen a lot of bearish activity lately with the stock falling to around $55 in trading on Wednesday. It was looking like the stock would find a home comfortably above $60 and potential rise back up to $70. Instead, investors have been selling the stock, which at around a market cap of $20 billion is one of the biggest stocks on the TSX.
It might be that investors have simply been flocking to better, cheaper buys in the industry.
Sproutly Canada Inc (CSE:SPR) is one stock that’s gotten a lot of attention lately. In just the past month, its share price has more than doubled. It all started when the company was seeing unusual activity. And when asked to comment on it, Sproutly announced that it was “negotiating with a beverage company regarding a potential partnership to jointly develop and market cannabis-infused beverages.” While it didn’t offer any specifics beyond that, it did note that it hoped the deal would be done by the end of April. That was enough to send investors into a frenzy.
Prior to the abnormal trading activity, Sproutly was trading at volumes of less than 500,000 per day. Since the 26th, when the price started to spike, Sproutly has seen volumes easily reach over a million. It just goes to show how powerful even a word like ‘beverage’ is on a company’s stock price. The hype surrounding edibles, and beverages, in particular, has no doubt been pushing the share price up.
Planet 13 Holdings Inc (CSE:PLTH) is another stock that’s been doing well, rising 60% during the same timeframe. However, in Plant 13’s case, the vertically-integrated Las Vegas-based company has seen incredible sales growth since launching its Superstore in November. The Company announced that in March, sales had reached $5.5 million and were up 28% from the prior month and 63% from November’s tally of $3.4 million.
Sales numbers have been very strong in Nevada, and the results are evident in Planet 13’s revenues as well. In addition, the store’s average daily visitors climbed from 1,848 in the first month operations to 3,194 in March. The popularity is clearly growing, and likely to do with many tourists now seeking out Las Vegas for multiple reasons.
Charlotte’s Web Holdings Inc (CSE:CWEB) has had the poorest performance on this list, rising ‘only’ 55%. In the past year, however, its stock price has soared 187% as strong results have helped The Company’s value continue to increase. A strong quarter earlier this month has helped encourage investors to jump onboard the stock. Charlotte’s Web has been doing something very impressive and unusual in the industry – recording consistent profits.
Not only have sales been increasing quarter over quarter, but the company has been able to keep posting a profit as well. It’s a rare feat so it might not come as a surprise that investors may have been ditching some of the bigger names in the industry for a company like Charlotte’s Web. This is a company I’d keep a close eye on as with $70 million in sales over the past four quarters, Charlotte’s Web is starting to become one of the bigger names in the industry.
Disclosure: Directors of Mugglehead own shares of Sproutly.