Dec 08, 2020 (Baystreet.ca via COMTEX) -- Market enthusiasm for cannabis stocks picked up pace after the U.S. elections. Although the House passed a legalization bill for pot, there is no assurance that cannabis companies will succeed in the U.S.
Aurora Cannabis /zigman2/quotes/203734337/delayed CA:ACB +0.08% nearly doubled from its 52-week lows. Despite selling shares to take advantage of the market's bullishness and posting weak quarterly results, investors speculated on its prospects anyway. The firm failed to grow profits in its Canadian market.
Cronos /zigman2/quotes/202715342/delayed CA:CRON -1.16% surged for the same reasons. Still, it is building a global network and would benefit from its Redwood wellness location in Los Angeles. Cronos is also building its brand awareness with Cove, Spinach, and Lord Jones.
Canopy Growth's /zigman2/quotes/202205609/delayed CA:WEED -0.74% /zigman2/quotes/200603886/composite CGC -0.99% BioSteel deal with the NBA's Philadelphia 76ers will improve the company's revenue diversification. Not only does the deal widen its audience for BioSteel but it associates the product with the sports market.
Investors should also watch multi-state operators. For example, Planet 13 /zigman2/quotes/204244604/delayed PLNHF -2.31% and Curaleaf Holdings /zigman2/quotes/205334348/delayed CURLF -4.27% are attractive investments for those seeking exposure in the cannabis market.
Any news of the U.S. rejecting pot legalization will send the sector lower. Investors concerned about these risks may want to wait for the sector to fall before starting a position.
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