Cannabis stocks continue to retreat
On February 6, the overall cannabis sector continued to retreat, with the ETFMG Alternative Harvest ETF (MJ) down almost 4.7% around noon and the Horizons Marijuana Life Sciences ETF (HMMJ) down almost 4.3%.
Some of worst performers in the first half of the day included Cronos Group (CRON), which had fallen nearly 8.4% by around noon, and Aphria (APHA), which followed with a fall of nearly 7%. Earlier in the day, Aphria rejected Green Growth’s offer for a takeover. Read Aphria Has Rejected Green Growth’s Takeover Bid—Here’s Why to know more.
Canopy Growth (WEED) (CGC) was also trading in the red with a fall of 6% followed by Tilray (TLRY), which gave up nearly 4.9% in the first half. Aurora Cannabis (ACB) wasn’t far behind, with its stock losing nearly 4.6% around the same time.
What’s driving the sell-off?
The cannabis market experienced a meteoric gain in January, with some stocks, such as Cronos Group, nearly doubling. Cronos was recently downgraded by GMP Securities after it achieved analysts’ price target.
This swift rise likely indicates that valuations have increased and investors are in correction territory when it comes to cannabis stocks. Soon, we’ll release our series on these stocks’ valuations for a better look at where the industry stands. In the meantime, read our previous report: What the Valuations of CRON, HEXO, and CNTTF Indicate This Month.