Leading stocks saw their prices decline following their recent third quarter reports
Expanding cannabis markets in the united states and the start of recreational use in Canada does not guarantee that stock prices will continue to climb. Marijuana growers continue to lose money. Recent earnings calls with leading stocks reveal that prices could fall as growers struggle to increase their supply.
Cannabis could become a $146 billion stock sector within the decade, but there are a lot of assumptions that must come to fruition for that to happen. First and foremost, the companies must follow through with their objectives.
Tilray, Canopy Growth, and Aurora Cannabis all saw their stock prices decline following their recent earnings reports. Analysts now say the prices could continue to fall significantly before the supply equates enough to meet the demand.
This week was the first time since Canada legalized recreational cannabis use that the stocks began to report earnings. The largest cannabis companies – Tilray, Aurora, and Canopy, saw stock price growth of up to 260 percent. Meanwhile, their companies continue in the red.
The numbers show that Canadian cannabis companies currently spend far more than they bring in. Canopy Growth is the leader in this category, reporting a net loss of $330.6 million in the third quarter. All three of the stocks mentioned above were down 10 percent or more on Wednesday.
The plight of cannabis producers is worsened by the fact that the cost-per-gram is falling in Canada. Rather than purchasing at set prices, the Canadian government is buying the product in bulk. The price of Tilray has fallen more than a dollar down to $6.21 per gram.