What’s Happening With Cannabis Stocks in May 2023?

Cannabis stocks were up this week, as the market began to turn, but how long will it last, and is more growth coming?

| More on:
Cannabis grows at a commercial farm.

Source: Getty Images

It’s starting to look like perhaps cannabis stocks may have hit rock bottom this week. After shares across the board fell lower and lower in 2023, there is a slight uptick recently. But it’s not necessarily due to cannabis stocks themselves.

Market positivity

It seems as though Canadian investors may finally be interested in looking for growth stocks again. Companies continued to hit 52-week lows again and again over the last few months, especially among cannabis stocks. As earnings continue to roll in across the board, however, some investors are jumping on the opportunity to buy low.

This may include those companies in the cannabis market. After hitting 52-week lows, Canopy Growth (TSX:WEED), Tilray (TSX:TLRY), Aurora Cannabis (TSX:ACB) and others all saw an increase in share price. Canopy Growth stock is up 5%, Tilray stock is up 27%, and Aurora stock is up 12% since hitting 52-week lows.

What about the cannabis industry?

News in the cannabis market hasn’t had anything too crazy to allow for a larger increase. However, this could change in the near future. More and more states in the United States continue to climb aboard the cannabis train, with the multi-billion-dollar industry promising more tax incentives and job growth.

In April, Delaware became the 22nd state to legalize recreational marijuana. However, it looks like Ohio, Pennsylvania and Florida may be next on board. This could occur as soon as the end of the year, if perhaps not next year during the next election.

Florida has already been making headlines, as the state recently passed legislation this month to allow medicinal cannabis patients to renew prescriptions through telehealth appointments. While it still needs to run up to the governor, it’s looking promising in such a conservative state.

More movement could come from the Senate soon, as the Secure and Fair Enforcement (SAFE) Banking Act could be passed. This would protect banks that work with cannabis businesses in states where it is legal.

Still a waiting game

Right now, cannabis stocks remain in a waiting game. Each of these companies will continue to have to prove themselves and their path to profits. While Tilray stock remains the only profitable one of the bunch, others may soon climb towards it. But most are awaiting legalization in the United States for that to be a sure thing.

This is why so many cannabis stocks have expanded to other sources of revenue. Tilray stock, for one, now has partnerships for beer production. Canopy Growth stock touts its BioSteel as a huge win. Aurora stock, meanwhile, has remained focused on the marijuana industry, and looks to expand in the medical marijuana sector. However, it’s also had to sell much of its locations and medical marijuana acquisitions to bring in funds.

Bottom line

These cannabis stocks may be on the upswing for now, but it’s still a very volatile market. If you’re interested in cannabis stocks over the long haul, then great! These three cannabis stocks may be a great option.

However, if you’re hoping for a quick turnaround and growth that we saw back in 2018 and 2017, I would hold out longer. We still need a lot of legalization to occur not just around the world but specifically in the United States. This would make the country the largest producer and consumer of marijuana in the world, creating a huge opportunity for investors.

Until then, however, perhaps it’s better to wait on the sidelines.

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 Amy Legate-Wolfe has positions in Canopy Growth. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Cannabis Stocks

Cannabis stocks have fallen.
Cannabis Stocks

2 Best Marijuana Stocks to Buy This Month

Marijuana stocks in the U.S. such as Green Thumb and Curaleaf can help you deliver outsized gains to investors in…

Read more »

A cannabis plant grows.
Cannabis Stocks

Can Aurora Cannabis Stock Recover in 2024?

Aurora Cannabis stock is down 99% from all-time highs but remains a high-risk bet, despite its cheap valuation.

Read more »

A person holds a small glass jar of marijuana.
Cannabis Stocks

The Best Cannabis Stock to Buy Right Now

This cannabis stock has jumped 30% in the last few months, with even more growth on the way – all…

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

Down 99% From All-Time Highs, Is Canopy Growth Stock a Good Buy Right Now?

Canopy Growth stock is a high-risk investment due to its negative profit margins and challenging liquidity position.

Read more »

Marijuana plant and cannabis oil bottles isolated
Stocks for Beginners

Aurora Cannabis’ Reverse Stock Split: Is the Stock a Buy Today?

Cannabis stock Aurora (TSX:ACB) is consolidating shares once again, but what does this mean for investors?

Read more »

Medicinal research is conducted on cannabis.
Cannabis Stocks

Where Will Cannabis Stocks Be in 10 Years?

Cannabis stocks could see a huge shift upwards should marijuana be rescheduled in the U.S., but you can still buy…

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

Forget Canopy Growth: 1 Cannabis Stock With Far Less Risk

Cannabis stocks like Canopy Growth (TSX:WEED) haven't done well for quite some time, yet this one deserves a major boost!

Read more »

Medicinal research is conducted on cannabis.
Cannabis Stocks

Is Canopy Growth Stock Worth Buying?

Canopy Growth stock (TSX:WEED) made a big move to consolidate its shares, but will this help the company move forward?

Read more »