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Why the Cannabis Sector Rallied Last Week


Aug. 18 2020, Updated 5:32 a.m. ET

Sector update

Last week, lawmakers in Canada approved Bill C-45, which legalizes cannabis in Canada, with a 52–29 vote. This approval was anticipated, and cannabis stocks rallied last week. The Horizons Marijuana Life Sciences ETF (HMMJ) rose about 7% between the closing on June 15 and the closing on June 22. Let’s look at how other stocks reacted in this period.

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Cannabis stocks pop

All ten cannabis stocks and the four ETFs in the above chart ended in the positive territory week-over-week with MedReleaf (MEDFF) gaining as much as 18.8% to close at 30.7 Canadian dollars. Both Canopy Growth (CGC) and Aurora Cannabis (ACB) (ACBFF) rose 10.3% each to close at 43.4 and 10.0 Canadian dollars, respectively.

Aphria (APHQF) was not far behind with a weekly gain of 9.3% to close at 12.7 Canadian dollars, while Hydropothecary rose about 9.1% and closed at 5.4 Canadian dollars. CannTrust followed with a gain of 8.3% to ~9 Canadian dollars, while Organigram rose about 7.3% and closed at 5.7 Canadian dollars. Emerald Health rose 6.7% to 4.2 Canadian dollars last week. Supreme Cannabis rose by 6.2% to 1.7 Canadian dollars, while Cronos (CRON) rose just 2.5% to 9.6 Canadian dollars.

YTD performance

Last week’s impressive gains also pushed some of the cannabis stocks into positive YTD (year-to-date) returns territory. Canopy Growth emerged as the top gainer with a 34% return YTD, followed by Organigram at 27% this year. Hydropothecary also gained about 20%, while MedReleaf was up 14% YTD.

Stocks that remained in the negative territory include Aphria and Emerald Health, which were down 37% each. Supreme Cannabis is down by 36% YTD. Aurora Cannabis has also seen a loss of 15.5%.


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