Legal cannabis may have seemed like the next gold rush, but it hasn’t quite turned out that way yet, as many of the biggest cultivators and distributors of medicinal and recreational cannabis are still seeking a pathway to profitability, according to Cannabis Weekly, via Bloomberg. In fact their challenges are pronounced that skeptical investors are circling pot stocks with an eye to shorting them, CW reports, and there is plenty of opportunity for the shortsellers.
- Most recently Aurora Cannabis missed its revenue target, sending its stock into a slide. Overall the BI Global Cannabis Competitive Peers Index is down 40% from its peak on March 21 of this year, CW notes.
- Overall shortsellers have netted $1.17 billion with short positions on pot stocks so far in the third quarter, per a report from S3 Partners cited by CW. That compares with a loss of $1.78 billion in the first quarter, when short positions didn’t pan out amid rising stock prices.
- For the year so far, the volume of short positions in pot stocks is up by $2.2 billion or 79% over the same period last year.
- However overall analysts remain bullish on cannabis stocks, and Aurora chief corporate officer Cam Battley noted that a number of positive developments are underway, including the opening of retail stores in Canada, with more to come internationally.