Cannabis stocks continue to rise as coronavirus keeps people at home

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The cannabis stock market is helping offset some of the losses from other types of investments

Perhaps it isn’t the ideal situation in which cannabis companies would have preferred to pick up benefits, but the fact is that cannabis stocks continue on the rise. The coronavirus outbreak has confined people to their homes in an effort to stop the virus from spreading exponentially and, with so many people on lockdown, the demand for cannabis has increased considerably. This has had the side effect of making the cannabis stocks more attractive to investors. This week alone, most of the big main cannabis stocks are reporting a spike in their share prices and it is attributed to the increased demand from consumers attempting to stock up from the fear of stores getting shutdown.

For instance, in California, sales are almost doubled, and, in Washington state, there is a 50% spike in just this past week, based on data from an industry tracker Headset. “We believe other states are likely seeing similar upticks in sales,” Canaccord Genuity analyst Bobby Burleson wrote in a research note last week. “This strength has benefited wholesale as well.” So far, California and New York have excluded cannabis dispensaries from shutting down, following up the order to close all non-essential business.

That might not be the case for other states, though, and the uncertainty of knowing whether other states with legal cannabis are going to order shops to close completely is still clouding the near future for the cannabis industry. Just a few days ago, Massachusetts ordered all non-essential businesses to shut down and that included the adult-use cannabis dispensaries.

After more than a year of taking a hard hit, investors seemed now with more enthusiasm about the future of the cannabis industry. The biggest winner this week was MedMen Enterprises, which is up by an impressive 54% this week, though it is still 91% below its highest number a year ago.