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SNDL Stock: Why Popular Sundial Growers Is Getting High Today

Sundial Growers (NASDAQ:SNDL) is on the move today. Shares of SNDL stock are up approximately 5% at the time of writing.

marijuana stocks Hand gently holding rich soil for his marijuana plants

Source: Jetacom Autofocus / Shutterstock.com

Here’s why this stock is climbing today.

Virginia Legislation Bullish for SNDL Stock

Most cannabis stocks are catching a bid today. This comes as Virginia lawmakers approved a bill that would see recreational cannabis usage legalized by 2024. Governor Ralph Northam has not yet signed this bill into law, but experts believe he will soon. The bill would require lawmakers to sort out regulatory and licensing details by 2022.

This deal is getting a lot of attention right now. This is not just because Virginia is on schedule to become the 16th state to legalize recreational marijuana. Rather, investors are focused on the fact that Virginia will be the first southern state to do so. This has buoyed expectations that federal legalization is more likely than not

Sundial is a stock that has become popular among retail investors recently. Social media forums such as Reddit’s r/WallStreetBets have piled into this trade of late. Accordingly, this is as much a momentum play as one can get in the cannabis sector. For those seeking outsized returns, in a risk-on environment like the one we’re in right now, Sundial looks like a good place to be.

Of course, there are a number of risks investors need to keep in mind. One such risk could be the company’s upcoming earnings report on March 17.

Upcoming Earnings Likely a High-Volatility Event

I expect Sundial’s upcoming earnings report to be a high-volatility event. This is a company that is burning through cash, so I don’t think investors will be concerned about actual earnings numbers. Rather, investors will likely be placing a greater emphasis on forward-looking expectations with respect to the medium- to long-term outlook for SNDL stock.

Right now, it appears investors are bullish on improved earnings for Sundial. The company has cleaned up its balance sheet and raised cash — positives for investors worried about the cash burn that has been an anchor for Sundial. Once a company at risk of delisting and potential bankruptcy, Sundial has received a new lease on life.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2021/03/sndl-stock-why-popular-sundial-growers-is-getting-high-today/.

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