After a devastating plunge in the market last week, it was relatively flat for most cannabis stocks.  The ETFMG Alternative Harvest ETF (MJ) was trading down less than 1% at the time of publishing this article.

Moving forward the sentiment in the cannabis sector should depend on the overall tone of the markets and whether the indices will be able to hold on to recent gains. 

The threat of a second wave of COVID-19 infections is currently causing a pause in this rally as the market waits for more data to clarify the severity.  If a severe second wave emerges and causes panic throughout the world, then we could see another leg down for all stocks, including those in the cannabis sector. 

Overall the cannabis sector has continued to adapt to the tough economic conditions and if a second wave takes place then it will only expedite the survival of the fittest.  There are certain cannabis companies, like Aphria (APHA),  that are better positioned for a downturn in the economy than some of its peers.

Aurora Cannabis (ACB) continues to slide as Stephen Dobbler Retires

ACB continued to lose momentum as their president and director Stephen Dobbler announced his retirement this week. Since hitting recent highs of almost $20 the stock has lost momentum and drifted lower. The stock is currently attempting to hold on to support around $13 per share and could slip back into the single digits. Many investors are waiting for the new permanent long term CEO to be announced.  The company said in May that a new CEO would be announced “in the next few months”. ACB remains highly speculative and investors should exercise caution before investing in the company at these times. 

Shares of HEXO (HEXO) fall on another capital raise

The recent rally in HEXO came to end this week after the company announced a C$34.5 million ($25.5 million) at-the-market stock offering program. The stock traded down more than 20% this week, following the announcement.

The Momentum continues for GW Pharmaceuticals (GWPH)

After posting stellar results last quarter, GW Pharmaceuticals has seen a significant rise in its share price. Over the past few months, the stock has risen from $67 to recent highs of $130 per share. Despite the recent volatility in the stock market, investors seem to remain very bullish on GWPH moving forward. The company produces and develops a flagship drug called Epidiolex that treats epilepsy. We will be watching GWPH very closely over the next few weeks to see if it can keep up the momentum.   

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ACB shares were trading at $13.37 per share on Friday afternoon, up $0.36 (+2.77%). Year-to-date, ACB has declined -48.42%, versus a -3.12% rise in the benchmark S&P 500 index during the same period.

About the Author: Aaron Missere

Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...

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