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Why Did Cannabis Stocks Fall on April 15?


Nov. 20 2020, Updated 4:12 p.m. ET

Cannabis stocks

Cannabis stocks were broadly in the red on April 15. Charlotte’s Web Holdings (CWBHF) saw a negative price action of 5.8%. Looking at other stocks, Emerald Health Therapeutics (EMH), Supreme Cannabis (FIRE), and Green Organic Dutchman (TGOD) fell 3.3%, 2.0%, and 5.0%, respectively. Village Farms International (VFF) and GW Pharmaceuticals (GWPH) saw a negative price action of 4.7% and 2.0%, respectively. The Horizons Marijuana Life Sciences ETF (HMMJ) fell 4.5%.

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Key driver

Aphria reported its third-quarter earnings on April 15. The company posted a loss during the quarter. Aphria’s earnings missed analysts’ estimates. The company announced a non-cash impairment charge on the assets it acquired in Latin America last year. The fact that Aphria sold less cannabis in the quarter also spooked investors in the cannabis space. After Aphria’s earnings release, we saw a sell-off in the cannabis space. In the past month, several cannabis companies reported soft earnings. While cannabis companies have been reporting revenue growth, profitability has been elusive for many companies.

Charlotte’s Web Holdings

Charlotte’s Web Holdings is among the cannabis companies that posted profits. While the company missed analysts’ estimates in the fourth quarter, it reported a record harvest. Despite the earnings miss, several analysts raised the company’s target price after its earnings release. Read Key Takeaways from Charlotte’s Web Holdings Q4 Earnings to learn more.

While several fund houses are bullish on the cannabis industry’s outlook, Jeffrey Gundlach holds quite a bearish view of the cannabis sector.


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