Stock NewsStocksDid Pot Stocks Make a Mistake Listing on the U.S. Markets?

Last year, we saw some of the big name cannabis stocks opt to list on the U.S. exchanges as they looked to build credibility while also trying to draw in more investments. However, along with that came a lot more scrutiny and expectations from analysts.
David Jagielski David JagielskiJanuary 8, 20196 min

Last year, we saw some of the big name cannabis stocks opt to list on the U.S. exchanges as they looked to build credibility while also trying to draw in more investments. However, along with that came a lot more scrutiny and expectations from analysts.

Canopy Growth Corp (TSX:WEED)(NYSE:CGC), which reported its quarterly results a few months ago, fell well short of even its lowest expectations. While the stock was already declining down since the start of recreational pot sales in October, a poor quarter ensured that the share price would continue its descent. It’s impossible to know the impact the results would have had on the stock had it not been listed on the NYSE with more eyeballs on its performance, but there’s no doubt that it faces much more scrutiny and expectations now than it did before.

Canopy Growth began trading on the NYSE in May of last year. And while it did climb in the months that followed, it would eventually drop back down to where it started, and returns since the listing have been flat.

Rival company Aurora Cannabis Inc (TSX:ACB)(NYSE:ACB) didn’t begin trading on the NYSE until October. It hasn’t seen any positive results since then as the stock has dropped 30% during that time. Aphria Inc (TSX:APHA)(NYSE:APHA) began trading in November, and it has been downright awful since then, losing nearly half of its value.

Cronos Group Inc (TSX:CRON)(NASDAQ:CRON) opted a different route and went the way of the NASDAQ back in February of 2018. Since February, Cronos stock has risen nearly 60% and it has outperformed the aforementioned pot stocks during that time. However, that’s also thanks in large part to the deal the company closed with Altria recently. Prior to that, it was one of the poorer-performing pot stocks on this list.

How about the stocks that stayed on the TSX?

Hexo Corp (TSX:HEXO) has not followed suit with its peers and is one of the bigger names not to list on the U.S. exchanges. If we track its performance since Cronos listed on the NASDAQ, its returns have come in at an impressive 53% and above the NYSE-listed stocks. In the past three months, Hexo has seen that trend continue, finishing only below Cronos during that time.

If we add The Green Organic Dutchman (TSX:TGOD) into the mix, it takes the honors of being the worst-performing pot stock on this list over the past three months, declining by an astounding 62%. If we extend the range to the past six months, the results remain the same, with TGOD at the bottom.

What do these results tell us?

In short, there’s a lot of volatility when it comes to pot stocks. And that makes it difficult to isolate any one factor related to their performance. While we can say that listing on the NYSE hasn’t done any favors for pot stocks, we can also say that when looking at TGOD, staying on the TSX hasn’t kept it away from the bears either.

But with recreational sales now legal, all pot stocks are going to be heavily scrutinized. And those on the big exchanges will certainly attract a lot more attention and could have more to lose for falling short of expectations.

One comment

  • Fredric Benet

    February 14, 2019 at 7:49 pm

    Wow! This can be one particular of the most helpful blogs We’ve ever arrive across on this subject. Actually Excellent. I am also an expert in this topic so I can understand your effort.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Twitter
Google+
RSS
Follow by Email