For the last month or so, the Canadian cannabis industry has been dominating. But this week, the sector experienced its first major hit in a while. And why? Well, it's because of the Ontario cannabis delay, which has sent marijuana stocks down the rabbit hole.
Ontario Cannabis Delay Sends Cannabis Stocks Down
On Monday, the province of Ontario announced its plans to delay the launch of cannabis stores. Now, the people of Ontario will not see bricks-and-mortar marijuana stores until six months after the October legalization.
In Ontario, after legalization, cannabis will be sold, but only through an online-only retail model. So, overall, it's not a huge problem; one analyst even said the Ontario cannabis delay represents "short-term pain, long-term gain."
It seems the analyst was spot on with his forecast. The short-term pain is already evident.
Cannabis Stocks Plummeting
A day later, cannabis stocks are plummeting on the market. Even big-named companies have been affected by the delay of Ontario cannabis stores, such as Aurora Cannabis.
Here are a few of Tuesday's worst-performing cannabis stocks.
- Aurora Cannabis (TSXV:ACB): Down 9.12%, as of 2:16 p.m. EDT.
- Canopy Growth (TSX:WEED): Down 7.76%, as of 2:17 p.m. EDT
- Golden Leaf Holdings (CSE:GLH): Down 2.22%, as of 2:11 p.m. EDT
- Cannabix Technologies (CSE:BLO): Down 9.15%, as of 2:12 p.m. EDT
More Thoughts on the Ontario Cannabis Store Delay
The delay has divided the market. While stocks are plunging, indicating panic over it, some analysts are claiming that this is a good thing and that the market is reacting in the wrong way.
Vivien Azer of Cowen and Company said that there's "a lack of understanding," and that it's "less sophisticated investors" that are sending cannabis stocks down, as they do not understand the long-term implications this delay will have on the Canadian cannabis industry.
The Takeaway
What do you think, though? Are you disappointed by the Ontario cannabis delay? Do you think cannabis stocks will be able to turn themselves around and end the week in the green?
Featured Image: Depositphotos/© Pixelery.com
