Pot Stocks Drift Higher - Here’s What’s Happening Friday

Cannabis stocks float higher after positive earnings give analysts and investors conviction that the haze clouding the industry’s longer-term outlook is lifting.

Author:: M. Corey Goldman
Publish date:: Feb 12, 2021 7:37 AM EST

Cannabis stocks rose Friday after positive earnings and sales numbers from some of the industry’s larger producers gave analysts and investors conviction that the haze clouding the industry’s longer-term outlook was lifting.

Shares of Tilray (TLRY) - Get Report were up 3% in premarket trading on Friday, while Canopy Growth (CGC) - Get Report was up more than 2% and Aurora Cannabis (ACB) - Get Report was up more than 1% following earnings reports that suggested the broader pot industry was beginning to move toward profitability. Cannabis ETF (THCX) - Get Report, meanwhile, was up 2.28%.

The cannabis space has been red hot in 2021, thanks in part to consolidation in the industry as well as expectations that the drop in demand for both pot itself and pot-infused products may be starting to pick up again after a pandemic-induced lull.

Expectations that a more “green” friendly Biden administration also may lead to federal legalization of marijuana has driven renewed interest in the broader cannabis sector, particularly on the retail side, where consumers have shown renewed interest in pot and CBD-infused food and beverage and medicinal products.

Aurora Cannabis on Thursday reported a wider-than-expected loss in its fiscal second quarter but said it was in a strong financial position and expects to continue “progress” toward positive cash flow.

That followed better-than-expected results from Canopy Growth, which earlier this posted fiscal third-quarter revenue that beat analysts’ forecasts amid a recovery in demand for pot and pot-infused drink and vape products. Canopy Growth also said it expects to achieve profitability in 2022.

The bottom-line improvements coupled with merger activity between the likes of Aphria and Tilray and Jazz Pharmaceuticals (JAZZ) - Get Report and GW Pharma (GWPH) - Get Report point to longer-term opportunity in the pot sector, according to analysts.

Nonetheless, speculative activity including chatter on message boards including Reddit’s now-infamous WallStreetBets forum continues to cast a haze on the short-term trading direction of pot stocks.

Shares of Tilray were up 3.64% at $33.33 in premarket trading on Friday, while shares of Aphria were up 2.19% at $17.25. Canopy Growth stock was up 1.72% at $41.35 while the Cannabis ETF was up 2.28% at $23.33.