What happened

Shares of Sundial Growers (NASDAQ:SNDL) were up 5.8% as of 3:19 p.m. EDT on Thursday after rising as much as 11.8% earlier in the day. The only new development for the Alberta-based cannabis producer was that it announced the launch of a new recreational cannabis brand on Thursday morning.

So what

Did the launch of a new cannabis product really warrant a significant move for Sundial's shares? Not really. For now, the company's new Palmetto brand will be available only in the provinces of Saskatchewan and Manitoba. These aren't very big markets. Sundial said that it plans to introduce the new product in other provinces later this year, along with vape pens that could be used with its new recreational brand.

Fingers holding cannabis leaf against a light green background

Image source: Getty Images.

While the new product launch was the biggest news of the day for Sundial, another reason for the stock's nice jump could be an announcement from earlier this week. On Tuesday, the company revealed that its CEO, Torsten Kuenzlen, and executive chairman, Edward Hellard, who is the controlling shareholder, entered into voluntary lock-up agreements. 

Sundial stated that 15% of the roughly 26 million shares controlled by the two executives will be able to be sold on Feb. 25, 2020. The rest of Kuenzlen's and Hellard's shares will be released for sale on Aug. 15, 2020. These lock-up agreements alleviated other investors' worries that the market could soon be flooded with Sundial shares, causing the stock to sink.

Now what

Investing in marijuana stocks always comes with a few wrinkles. As a new stock that conducted its initial public offering only a few months ago, Sundial has a few more wrinkles than most.

What's more important than new brand launches and lock-up periods is how Sundial actually performs in the Canadian cannabis and European CBD markets. While the company reported net revenue of 20.3 million Canadian dollars in its latest quarter, its net loss totaled CA$12.4 million. A lot more growth is needed to justify Sundial's market cap of close to US$480 million.