Reddit Day Trader’s Capitalizing on Cannabis Boom
Reddit day traders pushing cannabis stocks higher: Cannabis stocks, which have already been rallying on the back of Democrat’s strategy of lifting the federal ban, now started receiving backing from Reddit day traders.
Buying calls from the WallStreetBets forum is helping in building a strong upside momentum. Social media traders are particularly targeting Tilray (NASDAQ: TLRY) and Aphria (NASDAQ: APHA) amid speculations regarding the merger between the cannabis producers. Tilray stock price soared 50% in a single trading session while shares of Aphria (NASDAQ: APHA) grew 10% on Wednesday.
Reddit users believe both these stocks have more upside potential despite a stunning year to date rally. Tilray stock price is up more than 400% in 2021 while Aphria shares gained close to 240%.
Cannabis Industry Will Remain Hot in 2021
After a few years of depressed performance, the emerging industry is likely to see a big boom on the back of Democrat’s strategy of legalizing cannabis.
The majority of cannabis producers have also been forecasting near term legalization. For instance, in an earnings call on Tuesday Canopy CEO David Klein said he expects the Biden administration to decriminalize the drug and allow the firm to enter the US market in 2021. Tilray CEO Brendan Kennedy forecasts legalization in the next 12 to 18 months.
Recently, new Senate Majority Leader Chuck Schumer (D-NY) and a few others have said they will work aggressively on presenting a “comprehensive cannabis reform legislation” bill in the senate.
Moreover, Reddit and other social media retail traders are optimistic that merger and acquisition activities along with new institutional investments would create profit-making opportunities from high flying cannabis stocks.
“Over the next six months, there’s an expectation of more capital coming into the industry because it will now be investable to institutional players, and institutional bankers will help bring more capital into the industry,” Tim Seymour, the founder, and chief investment officer of Seymour Asset Management, said.