Please ensure Javascript is enabled for purposes of website accessibility

Why Canopy Growth, Aurora Cannabis, and HEXO Stocks Are Glowing Green Today

By Rich Smith - May 7, 2021 at 1:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Tilray's news is just the start of the good news for marijuana stocks.

What happened

Friday began on a high note for marijuana stocks, as investment bank Jefferies announced it was turning around its opinion of Tilray (TLRY) stock 180 degrees, upgrading the shares from underperform all the way to buy.

Tilray stock responded as you'd expect, surging 17% in morning trading, but other marijuana stocks are responding positively as well. As of 11 a.m. EDT, Canopy Growth (CGC -4.25%) stock is up a strong 6%, HEXO (HEXO 2.05%) is even better at 7%, and Aurora Cannabis (ACB -3.01%) is best of all with a 7.5% gain. But why is good news for Tilray good news for these rival cannabis companies, too?

Close-up of a crop of marijuana plants

Image source: Getty Images.

So what

Well, begin with the analyst comments on Tilray. According to the Jefferies note, which was covered on this morning, Tilray is "a clear leader in the Canadian market" and boasts a better growth profile than almost any other cannabis company in Canada, with added optionality in the event of marijuana legalization in the United States and an "attractive positioning to capture an EU upside."

And Europe may be a bigger part of this story than many investors yet think -- for Tilray, but also for Canopy, Aurora, and HEXO, too -- because the market there "is now picking up," notes Jefferies. According to the analyst, Germany alone accounts for 70% of Tilray's European sales. And there's also reason to be optimistic about France. As Marijuana Moment has reported, the French National Assembly just released "a multi-party parliamentary report ... advocating for marijuana legalization," and there's even talk of a national referendum that might approve legalization on a national scale.  

Now what

Meanwhile, here in the U.S., the movement to legalize marijuana at the state level continues apace. Over the past 24 hours alone, the Kansas state House of Representatives just passed a bill to legalize medical marijuana by a 79-42 vote, and that bill is now heading to the Kansas Senate. And in Alabama, a 20-9 state Senate vote in favor of legalizing medical marijuana was just followed up by a 68-34 House vote in favor -- and that bill is now off to the governor for signing.    

The way things are going at the state level, it seems inevitable that marijuana will eventually become legal at the federal level as well -- throughout the United States, but not only in the United States. No wonder marijuana investors are happy today.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends HEXO Corp. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Canopy Growth Stock Quote
Canopy Growth
$3.15 (-4.25%) $0.14
Aurora Cannabis Stock Quote
Aurora Cannabis
$1.61 (-3.01%) $0.05
HEXO Stock Quote
$0.22 (2.05%) $0.00
Tilray Stock Quote

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.