WallStreetBets Eyes Cannabis Stocks
While we’re on the topic of WallStreetBets, members of the subreddit have turned away from stocks like GameStop and are now focusing their attention on cannabis stocks. If you go on WallStreetBets, the first things you’ll see are memes and posts about buying cannabis stocks. The traders hold an optimistic outlook for cannabis companies and are betting that President Joe Biden’s administration will push for the decriminalization or legalization of cannabis.
WallStreetBets has sent cannabis companies Sundial Growers, Tilray, and Aphria on a turbulent ride this week. On Wednesday, Sundial Growers flew nearly 80%, Tilray jumped 50%, and Aphria gained 11%. But on Thursday, Sundial Growers fell nearly 20%, Tilray plunged 50%, and Aphria slumped 36%. Even with the steep drop in prices on Thursday, the cannabis companies are still up huge in the past 12 months. This wild volatility can possibly be attributed to the rise of retail investors on social media using commission-free brokerages to buy stocks, like the GameStop and AMC Entertainment fiasco.
Marijuana laws are changing at a fast pace. As more states start to legalize the medicinal and recreational use of cannabis for adults, investors are betting big on cannabis companies. In the United States, marijuana is now fully legal in 15 states and legal for medicinal use in 36 states. And during his campaign, President Joe Biden said his administration would pursue the decriminalization of marijuana, so investors are betting the cannabis market will continue to open in more states, fueling the growth of cannabis stocks.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.