It was a terrible Tuesday for most marijuana stocks, particularly the Canadian ones. Tilray (TLRY) sank by nearly 12%, while its partner-to-be Aphria (APHA) fell by 9%. Canopy Growth (CGC 9.48%), Aurora Cannabis (ACB 1.75%), Organigram Holdings (OGI 0.67%), and HEXO (HEXO) were close behind, sliding at rates from 4% to 7%.
If there's one thing investors despise, it's uncertainty. Tuesday's big question mark was New York, which is considered by many weed-watchers to be the next likely state to legalize recreational marijuana.
Yet on Tuesday, there were conflicting media reports about the state government's decision to flip the switch.
The Albany-based Times Union, for example, published an article that day headlined "Legislature nears deal on recreational marijuana legalization." Yet Marijuana Moment quoted state Senate majority leader Andrea Stewart-Cousins as saying negotiations over such legislation "reached a little bit of an impasse."
Much of this uncertainty can be attributed to the usual political horse-trading that goes into any significant piece of legislation. Most sensible New Yorkers -- even the politicians -- realize that the state is facing a budgetary chasm and desperately needs good tax revenue sources.
At the end of the day, for all the political noise, New York seems to be barreling straight toward recreational legalization. This might ultimately be the factor driving the prices of Canadian pot companies down; after all, it's their American peers that will be able to immediately pounce on the New York market, not them.