Call it a "Reefer Madness" moment. In a flashback to the classic 1936 anti-drug film, marijuana investors got spooked today by news reports of health concerns among cannabis consumers -- and it's playing havoc with marijuana stocks.
In 1:55 p.m. EDT trading:
- Aurora Cannabis (NASDAQ:ACB) fell 3.5%;
- Hexo (NASDAQ:HEXO) has lost 3.8%;
- Sundial Growers (NASDAQ:SNDL) stock is down 4.4%;
- and Tilray (NASDAQ:TLRY) got thrown for a 4.7% loss.
Separate articles published on major news sites over the past couple of days included:
- Recounting stories of children eating cannabis gummies and suffering overdoses (CBS);
- Citing a study linking a rising incidence of schizophrenia to "problematic use of marijuana" (CNN);
- and quoting an anti-marijuana activist calling it a "highly processed product" that's a source of "cannabis-induced psychosis" (Fox News).
These negative media mentions come at the same time when two competing marijuana legalization bills are making their way through the U.S. Senate and House, respectively -- and they come at the same time when President Biden is considering whether he will (or will not) sign any legalization bill that ultimately receives passing votes from Congress.
The more strident the criticism gets, the more likely the president will ultimately decide he will not sign a bill legalizing marijuana. And seeing as that seems to be the direction he was leaning before these headlines, I'd say that the chances for cannabis becoming legal at the federal level just got a whole lot worse.