Several stocks of marijuana continued to increase today. Actions of Cannabis Aurora (NYSE: ACB), Aphria (NASDAQ: APHA), and HEXO (NYSE: HEXO) are up 15%, 8% and 20% respectively as of 2 p.m. EST.
While Aphria has specific news that should fundamentally help the business, the moves generally continue a trend that has continued since the November 3 election.
Canadian marijuana producer Aphria today announced the closing of its previously announced acquisition of U.S. craft brewer SweetWater Brewing Company. But the general upward trend in marijuana inventories is due to the potential easing of restrictions the industry might see under a Biden administration.
Stockpiles of jars have grown since the five states that had related voting initiatives all passed them on election day. Ahead of the election, during the October 7 vice-presidential debate, Kamala Harris said that a Biden-Harris administration “would decriminalize marijuana and we would wipe out the records of those convicted of marijuana.”
Since polling day, Aphria, HEXO and Aurora shares have risen between 60% and 140%, although only Aphria shares have been in positive territory since the start of the year.
Decriminalization of marijuana in the United States is probably still a long way off, even with the backing of a Biden administration. But shares of companies that would reap huge profits continue to climb in an election-triggered recovery.
Investors should always focus on the business results of each company. Aurora, for example, restructured its business and raised capital this year as it suffered mounting losses. Shareholder dilution, job cuts and the consolidation of operations pushed the stock down 75% for 2020 before election day. Last week, however, Aurora announced positive progress with its first European delivery of medical marijuana directly from its European unit.
HEXO said it saw its revenue increase 23% sequentially and 76% year over year in its fiscal fourth quarter ended July 31, 2020. The company with a market capitalization of 500 million dollars also said it had $ 184 million in cash at the end of the quarter.
Aphria’s move into the craft brewing market is more important fundamental news. He says he will use the $ 300 million acquisition to help expand his addressable market, using SweetWater’s US infrastructure “to accelerate Aphria’s entry into the United States ahead of federal legalization of cannabis for. fuel sustainable profitable growth. ”
This is perhaps the most interesting information for investors. But those looking to add pot stocks to their portfolios should consider it a speculative investment until there is much more clarity on the road to decriminalization or full legalization in the United States.