This has been a seminal week for the cannabis stocks. What’s remarkable is how few Wall Street commentators are able to connect the right dots.
The group of 12 companies I track in this space surged another 22% this week. Several, including the transformed Tilray Corp. (NASDAQ:TLRY), gained up to twice that much ground.
Some have tried to attribute the rally to Martha Stewart’s new cannabidiol (CBD) dog chews. But anyone who really knows this space recognizes that while the news was a boost for hemp suppliers, the impact on mainstream cannabis markets is extremely limited.
Dogs get sick when they eat cannabis. They aren’t going to be wolfing down Martha’s infused treats any time soon.
And while Martha is working with Canopy Growth Corp. (NYSE:CGC) to supply the raw plant materials, CGC was actually one of the laggards this week. This is not a big story right now.
Neither is the merger of GW Pharmaceuticals (NASDAQ:GWPH) and Jazz Pharmaceuticals (NASDAQ:JAZZ) in order to consolidate cannabis drug development programs.
I love GWPH and will miss it as an independent stock, but this deal is more about age-old biotech business models than the cannabis revolution.
No, I think what’s happening to the cannabis stocks is simple hope. Most have recovered nicely from their shocking collapse in 2019. They’re ready for the future.
History will judge the results. We’re looking to cash at least two triple-digit-percentage cannabis wins in my IPO Edge portfolio soon. And there’s more to come.