Millions worth of small cap investor’s money has been pouring into the Canadian public cannabis sector, bringing companies evaluations, like Aurora Cannabis (TSE: ACB) and Canopy Growth Corporation (TSE: WEED), into the billions of dollars. This recent surge is most likely the result of Canada’s announcement by Justin Trudeau, the country’s prime minister, announcing his plan last year to legalize recreational cannabis in July 2018.
Cannabis companies in Canada have begun to show signs and attempts to monopolize the sector, most recently noted was the Aurora Cannabis billion dollar deal to acquire CanniMed Therapeutics (TSE: CMED).
Unfortunately, recent investors saw a massive sell off this past week due to a recently released statistics by the Canadian government which found the price per gram of cannabis in the country to be as low $6.85. To investors this limits the amount of revenue companies involved in the sale of cannabis can generate which has caused a chain reaction through public companies involved in the space. This caused Aurora’s stock price dropped 17%, Canopy Growth Corp saw their stock fall more at 15%, and the overall sector dropped by 19%. This has caused most companies in the Canadian sector to see a new first low for 2018.
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