Lots of people forecast that the cannabis industry in Canada is going to make major moves in 2018. It all seems very plausible, despite a number of cannabis stocks taking a couple of hits for the past month or so. It seems, at least lately, that the cannabis industry could announce whatever they wanted, and stocks would still drop. Today is another one of those days where cannabis stocks were down.
What Happened Friday?
On Friday, February 2, cannabis stocks started to drop significantly on the Canadian Securities Exchange. More specifically, investors can see Nutritional High International (CSE:EAT) and Global Hemp Group (CSE:GHG) dropping more than 10%. B.C.-based Global Hemp Group takes the cake, however, trading down nearly 15%.
What happened? Let’s try to get the full picture one company at a time.
- Nutritional High International
As of this writing, Nutritional High is trading at $0.47, putting the EAT stock down $0.06, or 11.32%. Based in Toronto, Nutritional High focuses primarily on manufacturing products infused with cannabis.
In late December, things were looking up for this small-cap cannabis company. Investors were genuinely excited about the direction that the cannabis sector was heading in going into the new year, and Nutritional High witnessed an 80% jump after announcing that the MedMen dispensary would start to feature its FLI brand. Sadly, things did not continue down this road. In fact, it was only three weeks ago that the company was trading down nearly 10%.
What’s interesting about today’s trading of the stock is that Nutritional High reported some pretty good news yesterday, which would have made me think that the stock would be seeing green today. Apparently, that’s not the case. Yesterday, the company disclosed that California-based TKO Products LLC, which Nutritional has entered into an agreement to finance with, has been given a notification from the City of Long Beach which states that it has moved to the final review stage of the process to acquire a medical marijuana business license.
Sounds like good news, right? Wrong - apparently. I would have thought news such as this would have caused Nutritional High to trade up nearly 12%, not down.
>>Read about the two shining stars of the cannabis industries
- Global Hemp Group
Similar to Nutritional High, Global Hemp Group has struggled a bit this month. This is all on top of a relatively successful December, in which the company reached a new 52-week high and announced results from one of its industrial hemp projects. Regardless, the Vancouver-based company is currently trading at $0.16, putting the GHG stock down $0.02, or 13.16%.
Why? The answer to that is a little unclear. The only news about the company that has surfaced this week is that Paul Perrault, Director of Global Hemp, acquired roughly 400,000 shares of the company in a transaction on January 31.
The Takeaway
One thing about the stock market is that it is always changing. One week a company could be plunging, and then the next it could be making a significant come-back. For the sake of investors interested in cannabis stocks, I hope the stocks start to trade up on Monday.
Check back then and I’ll be sure to give you an update.
Featured Image: Investors Hub
