Shares of major marijuana stocks including Canopy Growth (CGC -3.56%), Aurora Cannabis (ACB 0.74%), HEXO (HEXO -1.66%), Charlotte's Web (CWBHF 1.74%), and Aphria (APHA) dropped amid the tech stock sell-off this morning. (Yes, even though they're not tech stocks themselves.)
And here's the curious thing: In early afternoon trading, circa 1:20 p.m. EST, the techs have largely recovered, with the Nasdaq actually up 0.7%. But the marijuana stocks have not:
- Canopy is down 1%;
- Aurora dropped 4.8%; and
- HEXO, Charlotte's Web, and Aphria fell 5.1%, 8%, and 8.1%, respectively.
So what's the bad news that's still weighing on weed stocks but no longer affecting tech stocks? Actually, there doesn't seem to be any bad news. If you scan the feeds at marijuana news site marijuanamoment.com, for example, everywhere you look, good news is blooming:
There's legislation to legalize marijuana in Maryland and a medical marijuana law in the works in Tennessee. Connecticut just released a poll showing "majority support" for legalization there, too -- and no wonder. Michigan is apparently rolling in cash from taxes on its legalized marijuana law -- so much so that the state treasury is remitting extra money back to its cities and localities.
And yet, despite all the good news, despite America seemingly lighting up in unanimity, one fact remains glaringly obvious: None of the marijuana stocks has yet figured out a way to profit from this most popular of products. In 2020, with much of the America, and Canada, locked down and smoking up, Canopy Growth still managed to lose $1.8 billion, and Aurora lost $1.9 billion, for example.
And until these companies can figure out a way to earn a profit from their product, I fear that the dominant direction of their stock prices must be down.