Cannabis stocks CGC, CRON, and TLRY are in desperate need of macro tailwinds
For most of the campaign cycle, those bullish on cannabis stocks viewed a Vice President Kamala Harris presidency as the most beneficial to the sector. However, former President Donald Trump indicated last month on his Truth Social platform that he is allegedly will support a ballot referendum in Florida to allow to use cannabis the legislation also assigns cannabis to Schedule III under the U.S. Controlled Substances Act. Cannabis is currently listed as a Schedule I drug, in the same category as LSD and heroin.
With both candidates seemingly ready to tackle cannabis’ state-by-state regulatory uncertainty, lets check back in with the stocks that should be on investors’ radar.
Canopy Growth Corp (NASDAQ:CGC) stock is trading at $4.13, a far cry from its April 30 annual high of $14.90. The shares have carved a channel of lower lows since then, and are off by almost 40% in the last 12 months.
Cronos Group Inc (NASDAQ:CRON) boasts a similar setup, taking a 31% haircut off its May 16 annual peak of $3.14. Now at $2.16, the shares have spent the summer months consolidating between $2.10 and $2.50.
Tilray Brands Inc (NASDAQ:TLRY) has fared the worst, last seen at $1.64 and shedding nearly half its value from the April 4 annual high of $2.97. The shares are down 28.4% in 2024. Keep an eye on the company’s earnings report on Oct. 10 before the open; the options market is pricing in a 17.6% post-earnings move, much larger than the average post-earnings move of 11.2% in the last two years.
Despite analysts mostly on the sidelines with all three stocks, CGC, CRON, and TLRY all show a heavy call skew in the options pits. Perhaps these options traders are shorts seeking an options hedge, or maybe they see an oversold sector ready to bloom.