For fans of Sundial Growers (NASDAQ:SNDL), this has been a complicated year so far. The Canada-based cannabis provider has seen shares decline more than 30% over the past six months. Over the past year, it has fallen more than 50%. But are things finally turning around? Yesterday the company announced some good news that has SNDL stock rising again. Other cannabis stocks are back in the green as well.
A Green Day for Cannabis Stocks
Yesterday afternoon brought the announcement that SNDL had once again managed to avoid delisting — at least for now. As InvestorPlace Assistant News Writer Eddie Pan reported, the company had previously been given until Feb. 7 to reach the required $1 share price for 10 consecutive days. It was unable to satisfy this requirement, but Nasdaq has extended the deadline to Aug. 8, 2022.
This news has SNDL stock shooting up. It closed out the day higher by 13%.
For other cannabis stocks, it’s also been a good day. Fellow Canadian marijuana provider Tilray (NASDAQ:TLRY) closed up 10.7% for the day while Aurora Cannabis (NASDAQ:ACB) passed 11%. The day’s best performance, though, goes to Canopy Growth (NASDAQ:CGC) which closed up more than 15%.
Let’s take a look at what’s driving these gains.
Why It Matters
Much of the growth we’ve seen today has been due to earnings season. For Canadian cannabis stocks, earnings have either been good or at least in line with expectations.
Canopy Growth reported earnings that revealed higher-than-expected revenue from its other products. These non-cannabis categories included sports hydration and vaporizer technology. This was exactly what Wall Street wanted to see, and the company did not disappoint. For the third quarter of its fiscal 2022, Canopy exceeded analyst expectations, reporting revenue of 141 million CAD opposite the predicted 135.9 million CAD estimate.
Tilray has been focused on growth, expanding into new markets throughout 2022. The company confirmed that it would be launching Tilray Medical, a global medical platform with the goal of unifying its medical cannabis brands under one strategy. Today it announced that Tilray subsidiary SweetWater Brewing Company would be expanding its beer distribution across California. This expansion into bars, food service and retail establishments will make California the largest state in the company’s brand portfolio.
Aurora reports earnings this later week and coverage indicates that it will trim its losses per share. As today brought no specific catalyst, though, it is likely that ACB stock was moving higher alongside its peers.
Why It Matters
It’s clear that sluggish retail sales made for a difficult year for Canadian cannabis providers. What we’ve seen from Canopy, though, tells us that the market for cannabis companies’ other products has likely proved a saving grace.
Many eyes will continue to be on Sundial, though, as the company works to stay on the Nasdaq. As Pan reports, the company has given the index written assurance that it will “review all available options to comply with the $1 price requirement.” He adds that it also has not ruled out the possibility of a reverse stock split. Investors should absolutely be watching SNDL, but it might not be time to weed it out of your portfolio just yet.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.