Many cannabis stocks lost over 50% of their share price value over the course of last year. This article will cover three cannabis stocks, as well as negative trends in the industry, to give you information to consider when trading in 2022. Could this be an opportunity to buy in or sell off?
Negative Trends in Cannabis Stocks in 2021
Alleged Factors that Decreased Share Prices
Aside from normal cannabis segment volatility, assumptions about total legalization ultimately had cannabis stocks paying the price. Investors believe it was the lack of movement in U.S. legalization efforts and an over-expansion of cannabis stores that contributed to the negative trend.
Several types of cannabis industries emerged because of opportunities from new legislation, but timing of total legalization is important for their continued success. For instance, many companies who thought the speed of total U.S. legalization was going to be faster may have over-extended themselves too early. That being said, there might be a buy point if the stock prices turn around due to more legislation for legalization down the road.
3 Cannabis Companies with Decreased Share Prices
Tilray Inc (NASDAQ:TLRY): Decrease in Price
After under-performing the prior year, Tilray Inc started the year off continuing to decline -10% in share price. Currently, the Canadian cannabis company’s share price sits around $6.63. Surely, a long ways away from its all time high of around $148 in 2018.
The company mainly acquires businesses under the company brand to absorb revenue. They’ve acquired Manitoba Harvest, AbInBev, and Smith & Sinclair to name a few. These strategic purchases helped gain company value, but they have lofty goals for 2024. Tilray aims to pull in $4 billion in revenue, far from their current revenue of $210.48 million. It’s hard to know what the TLRY stock will do in the near future.
Photo by Matteo Paganelli via Unsplash
Curaleaf Holdings Inc. (OTCMKTS:CURLF): Acquisitions and a New President
Today, Curaleaf Holdings Inc., another leading international provider of cannabis products, is also down in the markets. Currently, the price is $7.83 dollars a share, nearly half of its amount last January. To offset this, they’ve hired a new president to change things around.
CURLF announced yesterday that Curaleaf’s new president will be Matt Darin. The decision to bring Matt into the position was his industry knowledge and leadership experience at an important moment in Curaleaf’s growth trajectory. The company also recently announced several strategic acquisitions in Los Suenos Farms, Tryke Companies, NRPC, and Bloom Dispensaries. So, there may be some hope for long-term investors come 2022.
Cronos Group Inc (NASDAQ: CRON): Decrease in Share Value
In the past year, Cronos stock has plummeted -55.38% and some investors may be entitled to compensation. Gibbs Law Group continues to investigate a potential Cronos Securities Class Action Lawsuit after a Cronos announcement in an SEC filing triggered a huge decrease in company stock value.
Shares of Cronos Group plummeted more than 15% after the company announced that it should have taken an impairment charge of at least $220 million and has to restate its financial statements for three and six months, ending June 30, 2021. An impairment charge is a cost that shows a reduction in the carrying value of a specific asset on a balance sheet. This reduction in asset value caused the equity value to decrease, further decreasing the share price and investor’s trust in the company.
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