Cannabis stocks rallied Monday after President Donald Trump appeared to support the use of marijuana products for senior citizen health care.
IBD's specialty consumer products industry group, which is predominantly made up of cannabis stocks, rose 3% midday Monday. That made it the second-best performing industry group after the rallying data-storage stocks, which were being led by Western Digital and Seagate Technology.
It was a rare day of outperformance for the marijuana trade, an industry that has been out of favor for years. Cannabis stocks are mostly penny stocks, with few trading above 10 per share. Institutional investors tend to avoid low-priced stocks because they often have low liquidity.
The majority of cannabis stocks are based in Canada, where marijuana has been legalized for medicinal and recreational use for seven years. In the U.S., marijuana remains a controlled substance under federal law but many states have legalized at least medical use.
Trump in August said he supports reclassifying marijuana as a less dangerous drug than under current regulations. On Sunday, he posted a promotional video about the purported health benefits for seniors of cannabis-related use, including pain management, cognitive decline and biological functions in general.
So far, there's no formal action on cannabis regulation, and some Republican lawmakers want to tighten controls on CBD products.
Cannabis Stocks Surge
Amplify Alternative Harvest, an ETF that tracks 10 cannabis stocks and has $166.8 million in assets, rallied 16.5%. It is forming a short pattern with a buy point at 39,89. AdvisorShares Pure U.S. Cannabis, an ETF with nearly $750 million in assets, surged 17% and cleared a trendline entry around 4.50.
Canada-based Tilray Brands soared nearly 40% in volume tracking for the highest in at least one year. The stock cleared an alternative buy point at 1.55. Its Composite Rating is 50. Its average daily volume of nearly 64 million shares is the highest in the industry.
Canopy Growth surged 20% and continued to form a cup-with-handle base with a 1.93 buy point. The stock is trading around 1.60 and has been trending lower since 2021. Its Composite Rating is 11.
Cronos Group gapped up nearly 12% in heavy trading and climbed above the 2.77 buy point of a flat base. Its 74 Composite Rating is among the highest among cannabis stocks but below the 90 that most leading stocks have.
CureLeaf Holdings, which has the largest market cap among marijuana stocks ($2.138 billion), rose 22% in double its average volume at midday. The stock broke a trendline with an entry around 2.65. Its EPS Rating is 18 out of 99.
Chicago-based Green Thumb Industries also cleared a trendline with an entry around 8.
Innovative Industrial Properties, a real estate investment trust that owns cannabis-growing properties, rose 1.5% to 55.30 a share. Although its price performance is flat, the REIT has an annualized dividend yield of 13.7%.
Among other cannabis stocks:
- SNDL broke out of a short pattern with a 2.74 buy point as shares jumped more than 15%. Its Composite Rating is 64.
- Truelive Cannabis rose more than 12% in heavy volume and cleared a trendline entry at around 7.50.
- Aurora Cannabis rallied about 30% as it cleared resistance around the 6 price level.
