CRB Monitor’s own Chief Research Officer James Francis explained recent volatility in cannabis-related business stocks on Nasdaq’s TradeTalks with Jill Malandrino.
During Tuesday’s discussion on “Trends in the Cannabis Space and What It Means for Investors Going Forward,” Francis said that the U.S. Department of Health and Human Services’ recommendation to the Drug Enforcement Agency in late August to reschedule cannabis to Schedule III “naturally resonated with investors.” They started buying en mass, leading to an “incredible spike” in the share prices of Tier 1 cannabis companies and exchange traded funds.
He added that investors were also optimistic about the potential for federal banking reform with the SAFER Act, which would reduce the risk for cannabis businesses and banks to transact. However, cannabis stocks “took a nose dive” in mid-October and “pretty much gave back everything they got in early September,” because of the turmoil in the House of Representatives and election of a conservative speaker, Francis said.
“While both of these would be game changers for the cannabis industry, each faces some significant challenges as they progress,” Francis said.
He concluded by noting we’re in another earnings season, and investors may see some positive company news.