Marijuana stocks rise on dispensary raids
Publicly traded marijuana companies had a rough week, but got a bounce Thursday following news of raids at the Cannabis Culture dispensary chain owned by Marc and Jodie Emery.
The marijuana activists were arrested at Toronto’s Pearson airport and a series of Cannabis Culture dispensaries, which are not licensed to sell medical marijuana, were raided in Vancouver, Ottawa and Toronto.
Shares of licensed Canadian medical marijuana providers rose alongside news of the raids, with Canopy Growth Corp. closing nearly six per cent higher at $11.07, Aphria Inc. up six per cent to close at $6.67 and Aurora Cannabis Inc. rising six per cent to close at $2.41 Thursday on the Toronto Stock Exchange.
Pot stocks rebounded after being hammered by a bout of bad news for the fledgling marijuana industry.
Developments included two class-action lawsuits filed against Canadian companies and statements by Canada’s point man on marijuana, Bill Blair, suggested the legalization roll-out would not be rushed.
Many investors had been pricing in the impact of the coming legal recreational market to medical marijuana stock valuations, expecting that demand for their product is set to grow immensely and immediately.
“These Canadian stocks are a huge battleground for traders and investors right now,” said Alan Brochstein, founding partner at New Cannabis Ventures.
“I don’t think there was any sort of change that was communicated there (by Blair) but it was maybe it was a wakeup call to people who don’t understand the process.”