Cannabis stocks are off to a rough start this morning after industry giant Aphria (NASDAQ:APHA) failed to deliver satisfying numbers in its fiscal Q3 report. The news has squashed positive sentiment around APHA stock and, by conjunction, Tilray (NASDAQ:TLRY) stock. However, many other cannabis stocks are facing downward pressure today. What gives?
Aphria’s fiscal report did little to satisfy investors. The company missed its revenue goal by about 8 million CAD, it reported net losses of 1.14 CAD per share, and it generally failed to live up to expectations. This is a bad look ahead of its merger with Tilray.
APHA stock is down 13% today, trading at $14.17, and TLRY stock has fallen over 11% to $17.49.
Much of these bad stats have been chalked up to the pandemic. With limited inventory due to lockdown and lack of proper consumer access, many businesses have obviously suffered. Aphria exposed just how hard the cannabis industry has been hit by the novel coronavirus’ second wave.
As a result, many other cannabis stocks are going down in sympathy this morning.
Slowpoke Attitude on Legalization Punishes Cannabis Stocks
Consumer sentiment toward cannabis stocks is souring in the wake of the pandemic. But, there is another factor at play. The industry is in a sort of purgatory as the U.S. federal government drags its feet on legalization. Many investors are getting fed up with its failure to capitalize on the Democrat-controlled White House and Congress. Will lawmakers actually legalize recreational use?
Today, Aphria gave investors an inside look at how the second half of 2020 hit cannabis stocks. Now, investors may anticipate other cannabis plays to reveal similar results. A number of plays are suffering this morning in sympathy with APHA stock. Reddit-favorite Sundial (NASDAQ:SNDL) is below the $1 mark yet again after losing 5.5% today. GrowGeneration (NASDAQ:GRWG) stock is seeing a similar downturn, dropping by 5% to $51.41. Canopy Growth (NASDAQ:CGC) has dropped 4.5% to $27.70.
Keep these moves on your radar today.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.