Canadian Pot stocks soared last Monday on the heels of Ottawa’s plans to roll out a draft plan to legalize recreational marijuana, but exactly a week later, how are those pot companies doing on the market?
“They have slowed off a little bit as the markets started sort of digests the news,” says CKNW Business Analyst Rob Levy.
“They have traded off a little bit. They are still above where they were a week ago. For example, when you look at a stock like Canopy Growth who was trading at $9.88 on that Friday, Monday closed at $10.18, up a little bit.”
Levy says there’s still a lot of risk buying into pot companies, he says it’s highly speculative and dependent on how legislation is tabled.
The thing about these kind of pot stocks, the way they are priced right now, their stock prices are so far beyond what they earn and the revenue they bring in so there is a lot of sentiment of how investors feel about the company which determines their price, which means more volatility.”
The federal government is rumoured to drop plans before 4/20, Canada’s annual pot celebration.
Last week, several Canadian pot companies saw stocks rise as much as 11 per cent.