Marijuana Stocks Stealing All of the Action in Canada by Unprecedented Volumes

Article by Financial Post


Witnessing the birth of an industry is the best way to describe what’s happened in the Canadian stock market in the past couple of weeks.

The unprecedented volumes in the likes of Supreme Pharmaceuticals Inc., Canopy Growth Corp., Aphria Inc., and Organigram Holdings Ltd. have triggered multiple market interventions by regulators attempting to cool the demand inflowing into marijuana stocks, all to no avail. All of these companies are trading at record highs on volume levels to match. So much so, in fact, that other issuers are starting to gripe about the effect.

“It’s all about all things marijuana,” complained one trader, who declined to be identified. “All the hot money is flying into those stocks, and so we’re kind of stuck here in neutral,” he said, referring to a non-marijuana issuer who has seen its volume decline dramatically over the past two weeks.

The grievances are born out by the data.

Since Oct. 15, marijuana stocks have dominated the trading on the TSX Venture index, averaging around 10 per cent of the volume on the total exchange. Valuations are commensurately higher as well, indicating that there are a lot more buyers than sellers.

Supreme Pharmaceuticals in the last 30 days has seen its share price increase from $1.18 on Oct. 19 to $1.90 on Nov. 18 — an increase of over 60 per cent on volume of just under 71 million shares. And that’s on the Canadian Securities Exchange, making it a record-breaking stock on so many levels it would take a small textbook to enumerate them all.

Read full article here.

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