Last week, ending on September 27, the cannabis sector was weighed down by the bears. Sector ETFs broadly ended the week in negative territory. The Cambria Cannabis ETF (TOKE) lost nearly 7.5%. In addition, the Horizons Marijuana Life Sciences ETF (HMMJ) declined by 10%.
The Emerging Marijuana Growers Index ETF (HMJR), which includes emerging cannabis stocks, lost about 7%. Consequently, the price movement reflected in the cannabis sector ETFs represented negative investor sentiment towards the sector last week.
What moved the market?
Additionally, the US and the Canadian markets were both in red last week. The S&P 500 Index, which represents the broader US stock market, closed nearly 1% lower. The negative political and international trade-related news continued to dominate the market sentiment. For example, last week Nancy Pelosi announced an inquiry to impeach President Donald Trump.
In other news, the ongoing US-China trade war stayed a non-starter. To make things worse, the Trump administration is discussing more investment restrictions on China. And, the negative momentum in the US seemed to have also weighed down the Canadian market last week. The TSX 300 index declined almost 1.22% for the week ending September 27.
Biggest cannabis movers
The above chart shows how 14 cannabis stocks and six cannabis ETFs did last week. KushCo. Holdings (KSHB) was among the biggest loser with a weekly decline of 46.2%. KushCo plunged last week after it announced the pricing of a $3o million direct offering.
The company would issue about 17.2 million units and use the proceeds from the sale to fund its corporate and working capital expenses. This offering is largely viewed as dilutive. This was reflected in the downward price momentum in the stock last week.
Also, Green Thumb Industries (GTBIF) lost significant value last week. The stock lost nearly 16.3% over last week. This is largely due to more vaping-related regulatory actions coming up in the US. Things weren’t getting better for CannTrust. The company trended lower last week. Read CannTrust Stock Hits an All-Time Low: What’s Next?.
The cannabis sector around the world
While the cannabis sector stayed subdued last week, there is some optimism with the upcoming cannabis 2.0 legalization in Canada. Canopy Growth (WEED)(CGC) has planned investments to capture this market. Read Canopy Growth: Getting Ready for Cannabis 2.0.
Around the world, more positive signs towards the cannabis industry are showing. In the UK, another medical cannabis product was approved. And, in the US, more states are opening their arms to marijuana. For example, Pennsylvania and South Dakota introduced legislation to allow some form of cannabis in their respective states.
For weekend reading
There is more positive news about cannabis legalization in the US. The House passed the SAFE Act. This would enable the banking institutions to conduct business with a legitimate cannabis business. To know why this is important, read Marijuana Legalization: House Passes SAFE Act in the US. Also, check out our Guide to Marijuana Laws in Massachusetts.