Tilray (NASDAQ:TLRY), Cronos Group (TSX:CRON)(NASDAQ:CRON), and Canopy Growth (TSX:WEED)(NYSE:CGC) stock are three of the hottest plays on the planet right now, with all three stocks more than doubling over the past few weeks. Tilray led the charge, clocking in a massive 270% gain since August 14, with Cronos and Canopy following with returns of 114% and 96% over the same time frame.
Meanwhile, Aurora Cannabis (TSX:ACB), a number-two player in the Canadian cannabis scene, has taken a backseat with its “modest” 68% rally from its 52-week low to $8.19 — a level that’s still 44% below its all-time high.
Naturally, this brings up the question: why is Aurora not blasting-off to new highs like its hot peers in Canopy or Cronos?
Now, I’d never thought I’d be shaming a 68% return in just over two weeks’ time, but one can’t help noticing that the sentiment between marijuana stocks has become as divided as it’s ever been. The days of every pot stock mirroring in the marijuana index are all but over. Today, there are colossal winners, laggards, and everything in between.
While Canopy and Cronos may have a lot going for them of late, the most remarkable story over the past week was how quickly Cronos investors shrugged off the short attack made by the infamous short seller Andrew Left. Left’s words caused Cronos shares to tank 28% in a single trading session, but to the surprise of many, the stock bounced back in subsequent trading sessions and appears ready to pick up where it left off a few days ago.
Andrew Left claimed that Cronos was a “sub-par player” in the space, but not even his harsh words, nor his influential status, was enough to derail the incredible momentum that Cronos stock (or the marijuana market) has exhibited of late.
Had Left expressed his bearishness for Cronos a month ago, I have no doubt that the entire industry would have plunged, as his words would have exacerbated the negative sentiment that surrounded the seemingly “dead” marijuana trade. But now that everybody’s hungry for the next alcohol (or pharma) investment, it seems like nothing can stop the next leg of the “green rush” that’ll likely last until the end of the year.
In a previous piece, I’d noted that it was more than likely that the Bitcoin crowd had jumped on to the marijuana bandwagon with the hopes of recouping losses from the soured crypto trade and that the resulting momentum would be unlike anything we’ve seen. I think Cronos’s recent bounce back shows just what kind of momentum we’re dealing with and how bubbly marijuana stocks could become.
Moreover, the fact that Cronos, Tilray, and Canopy are traded on popular U.S. exchanges (the NASDAQ and NYSE) is making them the go-to names for both U.S. and international traders who are feeling the need to speculate on what could end up becoming the “sexiest play” of all time.
Consequently, I believe that Aurora is a safer bet in the marijuana space due to its TSX exclusivity, which may be a roadblock for international crypto speculators who would have bet on the name if it were more readily available. The Bitcoin “infection” has spread to the marijuana space, so if you’re looking to make a marijuana bet before the crypto crowd jumps in, exclusive Canadian pot plays like Aurora look to be your best bet. That is, until Aurora stock pops up on the U.S. exchanges.
Stay hungry. Stay Foolish.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joey Frenette has no position in any of the stocks mentioned.