Ultimate magazine theme for WordPress.

Is Amazon the spark that reignites cannabis stocks?

0



Is Amazon the spark that reignites cannabis stocks?
After struggling in recent months, companies that focus on the booming marijuana sector could be primed for a takeoff. What’s happening: Everyday investors are increasingly excited about legislation in Washington that could dramatically change US marijuana policy. And on Tuesday,Amazon (AMZN) announced its support for the federal legalization of marijuana — indicating a growing willingness in Corporate America to throw its weight behind the issue. In recent days, names like Cronos (CRON), Tilray (TLRY) and Sundial Growers (SNDL) have seen a pickup in purchases by amateur traders, according to analysts at Vanda Research. Driving much of the action is the Marijuana Opportunity Reinvestment and Expungement Act, or MORE Act, which was reintroduced by Democratic House Judiciary Committee Chair Jerry Nadler last Friday. The bill would decriminalize marijuana at the federal level by removing it from a list of controlled substances and reassess previous marijuana convictions. “Despite the low chances that the Act is passed [in] the Senate (due to the filibuster), increasing media coverage is likely to attract the attention of the average retail investor,” Vanda’s Ben Onatibia and Giacomo Pierantoni told clients on Wednesday. They noted that Sundial and Tilray were the fourth and seventh most mentioned stocks in the popular Reddit WallStreetBets forum on Tuesday. “We remain focused on advancing our US ecosystem and expect significant cannabis reform to take place during this Congress,” Canopy Growth CEO David Klein told analysts on Tuesday. He said that there has been “substantial bipartisan momentum over the last couple of months.” What’s next: The S&P/TSX Cannabis Index has been in the red for the past three months, but remains up 33% year-to-date after soaring in January and February. Will Reddit love and Amazon’s shift be enough to trigger another buying spree? David Littleproud, the Australian minister for agriculture, drought and emergency management, told CNN Business Wednesday that the country does not believe there will be a red meat shortage, even though JBS accounts for about a quarter of the country’s red meat processing. “But we are obviously concerned that there are today limited operations at JBS facilities in New South Wales and Victoria,” he said. “Some work may resume in Queensland tomorrow. We’re hoping that they will get back to full capacity soon, but there is no definitive timeline.” Steve Meyer, an economist with commodity firm Kerns and Associates, agreed that a one or two day disruption could cause wholesale meat prices to jump. But if the problem is resolved within a few days, he said, restaurants and grocery stores are unlikely to pass those costs onto consumers. Investor insight: While the price of meat could temporarily rise, cattle futures have dropped, since JBS has had to stop slaughtering cows while it deals with the hack.

source

Leave A Reply

Your email address will not be published.