The cannabis industry soared in recent months on the expectation of decriminalization, with Democrats taking control of the Senate, and since November on the hope that President Joe Biden would ease federal prohibitions, but surprisingly last Thursday the industry took an unexpected plunge.
For those who are not very optimistic, a real change requires full legalization as decriminalization would initially allow the marketing of cannabis products similar to how the alcohol industry does, and as a consequence banks and financial institutions could spring into action offering cannabis companies much needed financing.
As a result, in contrast to GameStop, whose shares were held by major U.S. financial institutions, the companies that saw their shares rise last week tend to be owned by a much more diverse range of small hedge funds, investors and venture capitalists.
An industry rally so far has likely been driven by “retail investors” or “amateur investors. ” On Reddit’s WallStreetBets, Sundial, Tilray and Aphria were the three most discussed stocks on Wednesday (10), according to a regular number of mentions.