What happened
Cannabis stocks have been hit hard by investors this week. Several names that are down between 5% and 10% for the week are extending losses seen over the past month. Canadian companies Tilray (TLRY +3.72%), Aurora Cannabis (ACB +1.91%), and HEXO (HEXO +0.00%) have dropped 17%, 18%, and 28%, respectively over the last 30 days. And shares of U.S.-based cannabidiol (CBD) company Charlotte's Web Holdings (CWBHF +0.00%) have lost more than 27% in that time. For this week alone, these stocks have dropped as follows as of late Thursday:
- Tilray was down 7%
- Aurora was down 6%
- HEXO was down 10%
- Charlotte's Web was down 9%
So what
There hasn't been any overly meaningful news out of the cannabis sector this week. And the overall market has also taken a breather from its steady march upward this week as well. But most cannabis stocks remain speculative with investors waiting for their potential to be realized. Even taking into account the large declines seen over the past month, names like Tilray and HEXO are still 275% and 78% higher year to date, respectively.
Image source: Getty Images.
Now what
Tilray actually released some new product news his week. The company said it completed the first successful harvest of medical cannabis grown in its German facility for distribution to pharmacies in that country. And Tilray also launched its first cross-branded product in the U.S. with its craft brewer SweetWater Brewing. The lager beer uses Tilray's Broken Coast craft cannabis brand name.
Last week, HEXO said it acquired its first U.S. production facility. It bought the Colorado operation through a U.S. subsidiary to establish a presence in the country to produce "a full range of cannabis products." The facility will also complement its joint venture with Molson Coors (TAP 0.69%), which produces CBD-infused beverages in the state.
These companies are still working to become profitable. Over the last year and a half, Aurora consolidated its operations and restructured its balance sheet to that end. As speculative investments, marijuana stocks will be volatile, and the decline seen this week shouldn't be unexpected for investors.
