Over the past few years, good days for marijuana stocks have been few and far between. That wasn't the case with a clutch of Canadian pot slingers on Wednesday, though. More than a few handily beat the market, with bellwethers Canopy Growth (CGC -0.30%) and Tilray (TLRY -1.68%) closing a respective 4.2% and 6.2% higher thanks to an encouraging piece of news about their industry.
According to data released by Canada's federal government as part of its Cannabis Act Review, nearly all entities awarded cannabis licenses since legalization kicked off in late 2018 are still in business. The government's data revealed that only 95 such enterprises left the industry, which is less than 10% of the total.
That flies in the face of predictions of a vast market shakeout and shows that the Great White North's marijuana sector is more robust and resilient than many gave it credit for.
The business has a great many challenges in the country, including but not limited to a decline in wholesale prices, persistent black market competition, and high taxation. But local companies seem determined to plow ahead and keep producing/processing/selling their wares regardless.
As two of that market's leaders, Canopy Growth and Tilray were top beneficiaries of investor optimism around the news on Wednesday.
Like the rest of their peers, though, survival and success won't be easy. Both companies habitually post bottom-line losses, and the vast and enticing U.S. export market still is not directly accessible to them due to stumbling half-steps toward de facto legalization in this country.