After the recent short-lived growth spree, Canada’s marijuana growers’ stocks fell back to reality, and so the downslide in the sector continued. Investors, who used to feel really upbeat as they anticipated marijuana to be legalized throughout all the U.S. states, now fear that this might not actually happen. Financial scouts believe that the greatest risk now faced by the pot sector is that marijuana sales may be banned under U.S. federal laws. And even though the ban is not really likely to be imposed, investors are slightly wary that it might be passed.
Meanwhile, the good news that might bolster Tilray (NASDAQ:TLRY) stock was that the world’s largest brewer Anheuser Busch Inbev (BR:ABI) and Tilray are teaming up to research cannabis-infused beverages through AB InBev’s Ontario-based subsidiary Labatt, with each partner to contribute up to $50 million to the joint venture. Previously, Tilray also announced an exclusive global distribution agreement for medical marijuana with pharmaceutical giant Novartis (NYSE:NVS).
Still, with stocks back into bearish territory, we can expect prices to sink. In the days to come, Canopy Growth (TO:WEED) might slide down to $27.5, with Tilray likely drop to $70, while Aurora Cannabis (TO:ACB) and Aphria (TO:APHA) are likely to slide down to $5, and Cronos might fall to $10.5.
Ivan Marchena, Libertex Analyst