After the world's largest video game retailer —
GameStop ( GME Quick Quote GME - Free Report) and Silver, Reddit’s discussion has now popularized marijuana stocks like Sundial Growers Inc. ( SNDL Quick Quote SNDL - Free Report) (up 78.8% on Feb 10) and Tilray ( TLRY Quick Quote TLRY - Free Report) (up more than 50% on Feb 10). The pending merger between Tilray and Aphria is supposedly the main driver of the promotion for the latter.
Apart from Sundial Growers and Tilray,
Canopy Growth Corporation (CGC), Aurora Cannabis Inc. (ACB) and Aphria Inc. (APHA) also gained 6.3%, 21.2% and 10.7% on Feb 10, respectively.
A website that tracks stock ticker mentions on the forum found Sundial Growers was the most talked-about on Feb 10, pushing GameStop to the No. 2 position. Aphria and Tilray took the third and fourth spots, respectively. Canopy Growth and Aurora Cannabis both became the top-12 most popular tickers,
as quoted on an article published on Barrons.
Cannabis ETFs like
Global X Cannabis ETF ( POTX Quick Quote POTX - Free Report) (up 20.2% on Feb 10), ETFMG Alternative Harvest ETF ( MJ Quick Quote MJ - Free Report) (up 14.9% on Feb 10), Amplify Seymour Cannabis ETF ( CNBS Quick Quote CNBS - Free Report) (up 14.7% on Feb 10) and The Spinnaker ETF Series Cannabis ETF ( THCX Quick Quote THCX - Free Report) (up 13.9%) were also solid gainers.
Notably, Reddit’s “Wall Street Bets” forum promoted the stock GameStop last month as a value investment that pushed GME shares to as high as $483 on Jan 28 from $17.25 at the start of the year. Then, the group veered their focus toward silver, making the white metal another hit. Now, it’s time for marijuana.
Apart From Reddit, Democrats Boosting Pot Stocks
The cannabis companies have also received a boost from the Democratic Party’s intentions to legalize the plant at the federal level. Shares of major cannabis stocks rallied this year on Democratic victories in Georgia’s two runoff elections.
Biden’s victory and Democrats’ hold on the Senate could speed up the legalization of marijuana at the federal level, thereby providing a boost to the U.S. cannabis industry. Five states also legalized marijuana through ballot measures last year. A slew of financing deals and strong earnings reports also added fuel to the already-surging pot stocks.
Moreover, the pot area has been in a sweet spot lately on the news that
three Democratic senators led by Majority Leader Chuck Schumer said they would make reform legislation a key consideration in the current Congress, boosting hopes for a federal legalization (read: Top ETF Stories of January Worthy of Attention in February). ETFs in Focus POTX (up 189.9%), MJ (up 131.4%) CNBS (up 99.4%) and THCX (up 136.7%) are some of the toppers in the space this year. Goldman Sachs’ chief U.S. equity strategist, David Kostin , said on CNBC’s “Squawk on the Street” that popular Reddit stocks are mainly related to small caps, which is why they are logging astounding gains.
Moreover, continued increase in new special purpose acquisition companies have also led to gains. With such an investing backdrop, we can expect further rally in marijuana stocks and ETFs.
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