What happened

Shares of Canadian cannabis supplier HEXO (NASDAQ:HEXO) were down about 4.5% today, but that was after the stock traded 19% higher to start the day. 

HEXO Chart

HEXO data by YCharts.

So what

Why the huge reversal? The company put out a news release on its high-THC UP Cannabis brand this morning, and investors may have thought it was more news than marketing at first. 

A subsequent Reuters article today also may have dented investors' growth expectations for HEXO and other Canadian pot stocks. 

marijuana flower buds in a fancy blue dish

Image source: Getty Images.

HEXO said this morning that it is repositioning its high-end UP Cannabis brand in an attempt to differentiate the name from its competitors. The brand will now promise 20% THC or higher (verified on the packaging) for consumers who "want consistently superb quality and high THC at a competitive price," CEO Sebastien St-Louis said. 

Now what

Investors who saw the announcement may have initially driven shares up on the marketing push, but growth in HEXO is going to depend on more than marketing. The company is also trying to grow its marijuana business in Europe, but Reuters cited an industry report today that said Canadian pot growers may be scaling back in Europe. 

In a July 2020 presentation to investors, HEXO said, "Our goal is to become a top global cannabis company." Reuters today reported that an industry research firm is predicting that Canadian producers will give way to more European players in that market. 

Today's volatile ride in the share price is something that investors in the industry should be used to, and something that is likely going to continue in the long path toward increasing legalization. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.