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Cannabis stocks performance: Pre-Christmas profit-taking?

Most cannabis stocks could not make up any more ground in the past week, and perhaps investors are excited in view of the positive, though not quite decisive news around cannabis so shortly before Christmas. Aurora Cannabis costs a little more than eight euros and apart from a few both benevolent and devaluing reports from analysts, not much has happened.

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In the weeks before, cannabis stocks had exploded on the stock market, because Joe Biden will soon become president. At the same time, investors are now on the lookout for possible takeovers. Some blue chips, which are the biggest players in the cannabis business, definitely have cash in their coffers and we are curious to see if anything comes out of it. Various cannabinoids are becoming more and more important medically and in 2021 a breakthrough could be made in the development of personalized hemp therapies. 

In addition, all countries of this world, except Germany, where one diligently makes debts, need new ideas for economic growth. Many countries also want positive developments after the policy excesses of recent months, lockdowns, and the compulsion to breathe through a piece of cloth. However, Germany currently has a star on the sky of cannabis stocks, which surprised us more than just a bit, admittedly!

Read more about the performance of cannabis stocks this past week and find the latest cannabis news with the Hemp.im mobile app.

Current developments

The USA is moving faster and clearer on the legalization of hemp than ever before. The House of Representatives voted for nationwide legalization, which will probably get stuck again in the Senate with the Republican cowboys. However, the direction is right, because throughout the country people understand that a fair and prudent drug policy on cannabis brings more than the harsh approach. Joe Biden won’t be able to get around that at all, especially since now even conservative states with the big cattle ranches and lots of whiskey in the bottle agree with this development. For example, South Carolina, with its recent decision to at least allow hemp on prescription as medicine.

Mexico, on the other hand, has once again postponed the long-debated cannabis approval that the country’s Supreme Court has been calling for for years. Although senators agreed to it in November in large majority, another chamber decided to postpone the legalization. Are the drug cartels trying to prevent legalization, because legal cannabis would mean the end of their business? In any case, the government is making a fool of itself, similar to the so-called Grand Coalition under Angela Merkel in Germany, but at least the Mexicans are discussing and debating, which is completely unheard of in Germany.

And then there was Nicole Kidman’s entry into the business with hemp cosmetics. Well, this has less influence on the prices of weed shares. But investors have reasons to be optimistic, now that even superstars are getting involved with cannabinoids as an emerging, strongly growing market around wellness, medicine and stimulants. 

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Cannabis index and performance of cannabis stocks

At most, stocks with hemp as a business model lost single-digit percentages in week 50, and that goes for cannabis made in the USA, as well as from Canada. As we mentioned in the beginning, there was no big sell-off, but once again a bit of crumbling price marks. However, in many cases, prices continue to hover above a level that remained undercut for a long time in 2020 but then was broken after the election of Joe Biden. So, from a purely technical perspective, these are support levels in the chart that I’m sure more than a few investors will use to get back into the market. This is proven by a look at the trading volume, which always increases at such marks and thus indicates a greater willingness to buy.

Selected shares at a glance

Canopy Growth: Although the war chest should not be empty yet thanks to various investments, Canopy Growth is forced to close production facilities, as well as lay off people. Cannabis as a business continues to be exempt from government aid in Canada and so the price dropped to just over 21 euros.

Aurora Cannabis: Aurora Cannabis costs a little more than eight euros and apart from a few both benevolent and devaluing reports from analysts, not much has happened. This hemp stock from Canada fluctuates quite conspicuously below nine euros and some people think that could go down again quickly if no positive news comes.

Tilray: Here, too, the company is in rough waters from a technical point of view, because Tilray has already tried a few times to get back permanently above the range between 6 and 8 euros, but failed every time. So there are still no follow-up purchases for the hoped-for increase. Those who want to go long on this company – i.e. buy and not earn money with short selling – should probably wait for real profit, shown and readable in one of the upcoming quarterly reports.

Aphria: Similar situation, without much news, and the darling of many small investors Aphria slides around again in the range of 6 or 7 euro, give or take. Where the consistently numerous, recommending analyses get their information from is a bit of a mystery.

Deutsche Cannabis AG: Things are not just a bit clownish, but really clownish at Deutsche Cannabis, which has published virtually no news of substance in 2020, but has suddenly shot up from around 40 cents to now around 1 euro in recent weeks. We have always warned against this stock and bow humbly to all investors who have entered here despite the absence of annual reports. It is still difficult to find out what the company is doing to make money, but perhaps 2021 will no longer be such a murky glass ball?

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Outlook for calendar week 51/2020

Those who are not currently invested should perhaps exercise restraint in the last real trading week. But there can be days when even low volume pushes the prices of cannabis stocks. There does not even have to be directly a piece of positive news from the business – many professional investors pack a few pieces quickly before the end of the year in the vault, but also like to sell for tax reasons. 

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(Featured image by PublicDomainPictures via Pixabay)

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Isaac Atwood is a PR and marketing consultant who has worked with respected names in the financial industry. He has also sat down in many sessions with startups aiming to become the next unicorn. Isaac loves working with CEOs, business executives, and entrepreneurs who wish to enter the following markets: artificial intelligence, cannabis, virtual reality, cryptocurrencies, robotics, wearable and smart tech, and even the much-hyped space race. He is currently managing the brand portfolio of an Asian firm planning for its IPO by the end of the year. While his engagements have taken him around the world, Isaac is proud to call Toronto his home.