Pot Stocks Are Getting Crushed. What You Need to Know.
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,580,369 (+1.46%)       Melbourne $968,248 (+0.35%)       Brisbane $884,749 (+1.39%)       Adelaide $811,373 (-0.34%)       Perth $760,863 (-2.94%)       Hobart $742,968 (+1.78%)       Darwin $648,153 (+0.66%)       Canberra $952,739 (+1.89%)       National $998,019 (+0.96%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $719,049 (-0.09%)       Melbourne $491,976 (+25.26%)       Brisbane $488,613 (+1.66%)       Adelaide $415,517 (+2.98%)       Perth $408,247 (-0.12%)       Hobart $506,404 (-0.82%)       Darwin $341,678 (-4.94%)       Canberra $481,116 (-2.08%)       National $504,022 (+1.79%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,856 (+1,115)       Melbourne 15,164 (+2,253)       Brisbane 8,441 (+272)       Adelaide 2,729 (+236)       Perth 6,841 (+1,523)       Hobart 1,229 (+73)       Darwin 276 (-10)       Canberra 1,109 (+217)       National 46,645 (+5,679)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,816 (+356)       Melbourne 8,019 (+4,046)       Brisbane 1,858 (+11)       Adelaide 509 (+3)       Perth 1,903 (-10)       Hobart 172 (+1)       Darwin 395 (+4)       Canberra 856 (+152)       National 22,528 (+4,563)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $780 (+$30)       Melbourne $570 ($0)       Brisbane $600 (-$30)       Adelaide $570 ($0)       Perth $630 (+$5)       Hobart $550 ($0)       Darwin $700 (+$5)       Canberra $680 (+$5)       National $644 (+$4)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $730 (-$30)       Melbourne $550 ($0)       Brisbane $625 (+$25)       Adelaide $450 (-$10)       Perth $575 (+$5)       Hobart $450 ($0)       Darwin $550 (-$10)       Canberra $565 (+$5)       National $575 (-$3)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,423 (+399)       Melbourne 5,636 (+347)       Brisbane 4,280 (+665)       Adelaide 1,158 (+16)       Perth 1,894 (+159)       Hobart 373 (-3)       Darwin 149 (+7)       Canberra 629 (+31)       National 19,542 (+1,621)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 8,616 (+1,782)       Melbourne 5,988 (+275)       Brisbane 2,048 (+24)       Adelaide 365 (+22)       Perth 605 (-3)       Hobart 155 (+3)       Darwin 294 (+2)       Canberra 716 (+54)       National 18,787 (+2,159)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.57% (↑)        Melbourne 3.06% (↓)       Brisbane 3.53% (↓)     Adelaide 3.65% (↑)      Perth 4.31% (↑)        Hobart 3.85% (↓)     Darwin 5.62% (↑)        Canberra 3.71% (↓)       National 3.35% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND         Sydney 5.28% (↓)       Melbourne 5.81% (↓)     Brisbane 6.65% (↑)        Adelaide 5.63% (↓)     Perth 7.32% (↑)      Hobart 4.62% (↑)      Darwin 8.37% (↑)      Canberra 6.11% (↑)        National 5.93% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.7% (↑)      Melbourne 0.8% (↑)      Brisbane 0.4% (↑)      Adelaide 0.4% (↑)      Perth 1.2% (↑)      Hobart 0.6% (↑)      Darwin 1.1% (↑)      Canberra 0.7% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.4% (↑)      Brisbane 0.7% (↑)      Adelaide 0.3% (↑)      Perth 0.4% (↑)      Hobart 1.5% (↑)      Darwin 0.8% (↑)      Canberra 1.3% (↑)      National 0.9% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 27.6 (↓)       Melbourne 28.8 (↓)       Brisbane 30.9 (↓)       Adelaide 24.3 (↓)       Perth 34.1 (↓)       Hobart 28.7 (↓)     Darwin 36.9 (↑)        Canberra 27.6 (↓)     National 29.9 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 28.6 (↓)       Melbourne 29.4 (↓)       Brisbane 30.6 (↓)       Adelaide 26.3 (↓)       Perth 39.8 (↓)       Hobart 22.1 (↓)       Darwin 37.9 (↓)       Canberra 33.4 (↓)       National 31.0 (↓)           
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Pot Stocks Are Getting Crushed. What You Need to Know.

By CONNOR SMITH
Fri, Feb 12, 2021 5:10amGrey Clock 2 min

What goes up, must come down. But not necessarily this fast.

Canadian marijuana stocks that posted staggering gains on Wednesday fell just as fast Thursday, while U.S. multistate operators, or MSOs, were dragged down, but fared a bit better.

Tilray stock (ticker: TLRY) fell 49.7% Thursday, erasing all its gains from the prior trading day. Aphria stock (APHA) closed down 35.8%. Those companies expect to close a merger in the first half of the year. Under the deal announced in December, an investor would receive about 0.84 shares of the combined Tilray for every share of Aphria that they owned. Aurora Cannabis shares (ACB) were down 23.5%, while Canopy Growth (CGC) fell 22.1%.

ETFMG Alternative Harvest (MJ), an exchange-traded fund with exposure to the pot business, fell 24.6% from its Wednesday close. The ETF is still up about 74.5% year-to-date.

Meanwhile, Curaleaf (CURLF), a U.S. operator that lists shares over-the-counter in the U.S., fell 7.2%. Peers Green Thumb Industries (GTBIF), Cresco Labs (CRLBF), and Trulieve Cannabis (TCNNF) were down between 6% and 8%.

Canadian pot stocks, especially, have rallied in recent months on a wave of sentiment-driven gains as investors bet on positive political developments. Meanwhile, U.S. growers, which would benefit from an improved legal landscape, have lagged their competitors that operate in the smaller Canadian market.

Cantor Fitzgerald analyst Pablo Zuanic told Barron’s in an email that the recent action in pot stocks involving Reddit traders makes it hard to predict day-to-day moves, especially with the more-liquid Canadian growers.

“A look at the [GameStop] stock chart should be cautionary,” Zuanic added. “That said, we continue to think the top US MSOs are attractively valued taking a long-term view, even though they will get some of the Canadian downdraft.”

Ironically, some observers last month likened the move in GameStop (GME) to Tilray’s brief parabolic jump in 2018. The WallStreetBets forum on Reddit was recently littered with posts about pot stocks. One of the top posts Thursday morning likened the recent action in Canadian pot stocks to a casino.

Zuanic said on Wednesday that the gap in performance between U.S. and Canadian licensed producers, or LPs, could signal interest from the Robinhood crowd. Robinhood users can’t trade over-the-counter stocks on the platform.

“Sure, the news flow backdrop has also helped (the notion the US will open soon and Canadian LPs will benefit; news about exports), but we think this does not explain the big delta in Canada vs. US performance,” he said. “We wonder if the average RH retail investor knows the difference between an MSO and an LP, and the very different fundamentals of both cannabis markets.”

Ihor Dusaniwsky, a managing director at short-selling analytics firm S3 Partners, noted on Wednesday that there’s also a short-selling angle at play. Tilray began the year with short interest at about 48% of shares available for trading, according to S3 Partners. S3 estimates a recent short interest at 23% of shares available for trading, implying a large amount of covering, which helps drive prices up.

Short sellers sell borrowed shares with the hope they can replace the stock by purchasing it at a lower price. Dusaniwsky notes that Tilray and Cronos (CRON) saw the largest yearly decrease in short interest as a percentage of shares available for trading. He added that the top 20 cannabis shorts in the sector were down $4.32 billion in net-of-financing mark-to-market losses in 2021 by Wednesday.

“The yearlong rally has spurred short squeezes in most of the top 20 most shorted stocks in the sector and we should see the squeezes continuing, especially if the potential for nationwide U.S. cannabis legalization continues to increase,” Dusaniwsky added.

As with GameStop, the traditional buy-and-hold investor might want to stay away until things cool down.



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Inflation takes a dip, while bananas and melons make a mash of prices

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The rate of inflation in Australia has fallen to 4.9 percent, according to data from the Consumer Price Index. Inflation is down from 5.6 percent in September and a peak of 8.4 percent in December 2022.

The housing, transport and food and non-alcoholic beverages sectors were the strongest contributors to the October increase, which is consistent with trends shown in ABS data from September.

“CPI inflation is often impacted by items with volatile price changes like Automotive fuel, Fruit and vegetables, and Holiday travel,” said acting head of price statistics at the ABS, Leigh Merrington. “It can be helpful to exclude these items from the headline CPI to provide a view of underlying inflation.” 

Food and non-alcoholic beverages rose from 4.7 percent in September to 5.3 percent in the 12 months to October, driven by the rising prices of melons and bananas. 

Banana prices are trending upwards, contributing to higher food prices overall. Credit: Nigel Killeen/Getty Images

In good news for would-be home builders, new dwelling prices rose 4.7 percent, the lowest annual rise since August 2021, as a result of easing material supply conditions.

While the ABS noted that electricity prices rose 10.1 percent in the year to October, Mr Merrington said it could have been worse, if not for the introduction of the Energy Bill Relief Fund.

“Electricity prices have risen 8.4 per cent since June 2023. Excluding the rebates, Electricity prices would have increased 18.8 per cent over this period,” Mr Merrington said.  

The inflation figures come ahead of the final meeting for the year of the RBA Board next Tuesday. The board raised the cash rate by 25 basis points at the November meeting following an increase in the rate of inflation in September. 

 

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