(Bloomberg) — Pot stocks extended their record-setting rally to a fourth day Thursday as Reddit-inspired traders continued to pump up the sector to multiyear highs.
Sundial Growers Inc. led the advance, surging 49% premarket to add to its 161% gain over the first three trading days of the week. FSD Pharma Inc. rose 21%, Organigram Holdings Inc. added 25%, Aurora Cannabis Inc. gained 13% and Tilray Inc. climbed 6.5%. The ETFMG Alternative Harvest ETF, known by its ticker MJ, rose 5.4%.
The moves are reminiscent of late 2018, when Canada was about to become the first large economy to legalize recreational marijuana use, sending cannabis stocks surging. Tilray’s three-day gain to start the week was its biggest ever, although it’s still well below the intraday high of $300 it hit in September 2018.
© Bloomberg Tilray surge leaves it well below 2018 highs
“As witnessed with GameStop and AMC, retail investors from the WallStreetBet Reddit crowd obviously have a lot of influence and power,” said Matt Hawkins, managing partner at Entourage Effect Capital, a cannabis-only private equity firm. Hawkins said he doesn’t see as much risk to U.S.-focused cannabis companies from such activity, though some of the Canadian growers are more vulnerable.
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GameStop Corp., at the forefront of the initial market exuberance, traded as high as $483 in late January, when it briefly became the largest company in the Russell 2000 Index. It’s now retreated to near $50 per share.
The Global X Cannabis ETF (POTX), the Cannabis ETF (THCX) and Amplify Seymour Cannabis ETF (CNBS) all posted record inflows in the latest session for which data is available. Those three products, along with the $2.6 billion ETFMG Alternative Harvest ETF (MJ), are the top-performing exchange-traded funds so far this year.
(Updates share moves and adds ETF data)
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