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Why Aurora Cannabis, Aphria, Cronos Group, and Other Marijuana Stocks Crashed Today

By Joe Tenebruso - Feb 11, 2021 at 2:21PM

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Traders are bailing out of pot stocks. But should they be?

What happened

Cannabis stocks plunged on Thursday as traders rushed to take profits in companies that analysts say have seen their share prices rise too far, too fast.

Here's how some of the most popular marijuana stocks were performing as of 2:15 p.m. EST.

  • Aurora Cannabis (ACB 1.87%), down 21%;
  • Cronos Group (CRON 1.97%), down 20.6%;
  • Hexo (HEXO 1.58%), down 22.3%;
  • Canopy Growth (CGC 10.34%), down 21.4%;
  • Aphria (APHA), down 27.6%.

So what

Pot stocks have caught the attention of traders on Reddit and other social media sites in recent weeks. Spurred by their excitement about the possibility of federal marijuana legalization in the U.S. now that the Democrats control the Senate, the House of Representatives, and the White House, many traders in the 8.9 million-member WallStreetBets Reddit group have ramped up their bets on weed stocks. 

A $100 bill in the shape of a cannabis leaf.

Shares of Aurora, Aphria, Cronos, Canopy, and Hexo gave up some of their recent gains on Wednesday. Image source: Getty Images.

Up until the market close on Wednesday, that optimism had been playing out well for investors. Many cannabis stocks had more than doubled since the beginning of the year.

APHA Chart

APHA data by YCharts

Now what

However, analysts have been cautioning investors that in the wake of these torrid gains, the prices of many marijuana stocks no longer reflect the fundamental values of their underlying businesses. On Wednesday, many traders seemingly decided to pay attention to these warnings and sell their shares.

Still, cannabis remains one of the largest growth opportunities for investors in the coming decade. And if the stock prices of industry leaders such as Canopy Growth and Aphria pull back even further in the coming days, it's possible that long-term-minded investors could find some intriguing bargains.

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Stocks Mentioned

Aurora Cannabis Stock Quote
Aurora Cannabis
ACB
$2.73 (1.87%) $0.05
Canopy Growth Stock Quote
Canopy Growth
CGC
$5.55 (10.34%) $0.52
Cronos Group Stock Quote
Cronos Group
CRON
$3.10 (1.97%) $0.06
HEXO Stock Quote
HEXO
HEXO
$0.26 (1.58%) $0.00
Aphria Stock Quote
Aphria
APHA

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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