Shares in cannabis companies surged on Wednesday, extending a months-long rally due to bets on decriminalization under the Biden administration, as the Reddit trading community behind a recent trading frenzy promoted the stocks.
One post on WallStreetBets, the Reddit forum linked to the past month’s surges in GameStop Corp, AMC Entertainment and others, told users that shares of producers Tilray Inc and Aphria Inc have more room to rise.
That post was liked by around 10,000 other users in just twelve hours and shares in the two companies jumped by 21 per cent and 10 per cent respectively.
U.S.-listed shares of top pot producer Canopy Growth Corp were up 3 per cent after results on Tuesday, while the ETFMG cannabis stocks tracker, which has more than doubled in value since November’s presidential elections, gained 7.3 per cent.
Tilray, being taken over by Aphria in a complicated reverse merger, has gained more than 400 per cent in value since the deal was announced in December. Aphria has gained 243 per cent over the same period.
Shares of other cannabis producers have also surged to record levels, helped by a wave of legalization in major U.S. states and the Democratic party’s promise to decriminalize the plant at the federal level.
Changes promised by some in President Joe Biden’s party could help give cannabis companies access to more traditional methods of banking and open the sector to new, institutional investors.
(Reporting by Shariq Khan in Bengaluru; editing by Patrick Graham)