Article by The Canadian Press via CBC News
Several Canadian cannabis companies had their stocks temporarily halted on the Toronto Stock Exchange early Friday afternoon due to volatile swings in trading.
The Investment Industry Regulatory Organization of Canada (IIROC) halted trading on Canopy Growth Corp., Aphria Inc., Aurora Cannabis Inc. and MedReleaf Corp. between approximately 12:15 p.m. and 12:30 p.m. ET. Trading resumed for all shares within about 10 minutes.
Shortly before the halts, shares of Canopy Growth dropped 14.78 per cent, Aphria 15.5 per cent, Aurora 14.7 per cent and MedReleaf dropped 19.2 per cent.
IIROC said the reason for the temporary halts was the single-stock circuit breaker rule, which limits sudden price swings of major Canadian stocks.
This means that a five-minute halt of trading in a security is automatically triggered — and may be extended for an additional five minutes — across all Canadian marketplaces if the price of the security swings 10 per cent or more within a five-minute period.
Vahan Ajamian, a research analyst with Beacon Securities Ltd., said the sudden drops in cannabis companies’ stock prices could be explained by year-end profit taking.
“All these stocks have had a fantastic few days and months,” he said. “People are likely looking to crystallize gains by the end of the year.”