Weed stocks are getting clobbered
- Marijuana producers saw a major sell-off on Tuesday.
- A slew of investments by beverage companies spurred a rally across sector in recent months.
- Tilray, one of the largest marijuana stocks, is set to report earnings after the closing bell Tuesday.
After a week of massive gains, shares of the three largest publicly traded marijuana companies saw a massive sell-off Tuesday, down between 5% and 9%, as Tilray plans to release its first-ever earnings report.
Here's how they stand:
- Canopy Growth: -10.8%
- Tilray: - 4.6%
- Cronos Group: -11.9%
- Aurora Cannabis: -10.4%
The Horizons Emerging Marijuana Growers Index ETF, which tracks other smaller producers in Canada, fell about 5%.
Tilray, the second largest publicly traded cannabis company by market cap has surged 138% since its initial public offering in July. Analysts polled by Bloomberg are expecting the British Columbia-based company to report an adjusted second quarter loss of $0.85 a share on revenue of $9.02 million.
Canopy, the only company worth more than Tilray on public markets, posted a loss of $0.11 a share in its first quarter.
Tuesday's selloff comes after a hot streak for marijuana stocks that stems all the way back to Canada's full legalization vote in June. Canopy, for instance, has risen 548% since its Nasdaq debut a year ago, fueled by massive investments from Constellation Brands, the company behind massive beers like Corona and Modelo. This week, Bloomberg reported that British spirits maker Diageo was discussing a deal with three Canadian marijuana companies.
Legal sales of marijuana are set to begin nationwide in Canada on October 17.
