Canopy Growth gained 10%
Yesterday, April 30, Canopy Growth (WEED) rose 10% and closed the day at $30.10 Canadian. The broader cannabis market was also higher with the Horizons Marijuana Life Science ETF (HMMJ) ending the day 3% higher and Aurora Cannabis (ACB), MedReleaf (MEDFF), and Hydropothecary (HYYDF) each gaining 6%.
What moved cannabis stocks?
Yesterday, several media outlets reported that the catalyst to the positive momentum in the cannabis sector was driven by a BNN Bloomberg report. According to the report, some Canadian pension funds are among the list of investors to acquire a position in Canopy Growth. They include British Columbia Investment Management, Alberta Investment Management, and Canada Post’s pension fund.
What does it signal?
Usually, pension funds are conservative in their investments and stay away from making investments in high volatility stocks such as those in the cannabis sector. That sector has been particularly volatile, as we’ve seen in Market Realists’ regular weekly updates.
The pension funds’ investments in cannabis don’t mean the riskiness of this sector has changed. But it sends an important signal to the market that the sector has serious potential for investors.
Most of the cannabis investors may have experienced a significant decline in their investments year-to-date, much like the cryptocurrency wave. However, they are not the same. To learn more, read Why the Marijuana Wave May Not Be the Same as Cryptocurrency.