Hardly a day goes by when at least one marijuana stock posts an outsized gain or a steep drop in price. One prominent example on Tuesday was Canada's OrganiGram Holdings (NASDAQ:OGI), which closed 9% lower.
That reaction comes one day after OrganiGram released its Q4 of fiscal 2020 results, which all in all weren't particularly bad.
Rather, OrganiGram on Tuesday seemed to fall victim to investor gloom that settled over marijuana stocks generally, with top names such as Aurora Cannabis and Aphria also declining. Outside of some restructuring news from Aurora, there wasn't much in the way of material developments to drive the sector down as a whole.
Investors might also be concerned about U.S. politics. While there is optimism that the incoming Biden administration might be more accommodating to cannabis companies, it's becoming apparent that it might -- at least initially -- have its hands full coping with a messy transition from the Trump era. Given their consistently money-losing ways, pot companies need all the legislative help they can get ASAP.
Marijuana stock investors know well that they have bought into a sector that is highly volatile, particularly on the cusp of a dramatic change in national leadership. Good or bad news, either sectorwide or company-specific, can really rock these stocks. On Tuesday there was no material change in OrganiGram's prospects for success, so believers in the company might do well to keep hanging on for the ride.