Cannabis stocks took a downward spiral on Friday amid a global market collapse that saw investors pull out without any prior warning.
The Dow Jones clocked on an all-time low of 400 points at the back end of some poor proceedings coming out of Germany and the US, leading up to nerve-racking scenes globally. Such an unexpected turn of events has not been witnessed since the backend of 2007. The primary indicator of what was to come was the yield curve inversion which proved to be a forerunner of an economic downturn.
The consensus had been that the market has had a strong run-up leading to 2019. Several industry players and partners echoed this view.
“People are taking their time to see what comes next as earnings fall out, leading to good revenue growth. Lots of questions are being asked in regards to the rise of valuations. However, in just this past week, we’ve had a good turn around, and as it is, these upward movements tend to result in some pullbacks,” said Jason Wilson, a partner in the ETFMG
In the regulatory side of things, meetings have been held by lawmakers in Connecticut on bills to legalize cannabis and increase the states medical outreach. Should the bill come into law, anybody aged 21 and above can use, buy, and possess cannabis for recreational purposes.
It was not doom and gloom for companies; some were still able to navigate the downward trend notably MedMen Enterprises Inc, which was able to trade up 6%. This came at the back of the company entering into a profiting agreement with cannabis investor Gotham Green. Adam Bierman, the CEO of MedMen mentioned that the agreement would result in more effective working capital, as well as other more operational benefits, acquisitions, and expansions.
Another company who bucked the downward trend was Curaleaf Holding Inc. which gained 32% in value after news came out that BlackRock Inc. (the world’s leading asset manager) acquired a substantial stake in the company.
Other companies had to contend with the fact that their prices fell by certain percentages. Some of such companies and their corresponding loss factors include; Cronos which was down by 4.9%, Aleafia Health Inc. down by 3.8%, Hexo Corp by 3.8%, Aphria Inc. by 3.8% and Aurora Cannabis