Weed Week: COVID-19 drags on sentiment as ASX-listed pot stocks go 0/33
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The Australian sharemarket officially entered a bear market yesterday — defined as a cumulative fall of more than 20 per cent.
Aside from some gold miners, almost no sector has been spared from the virus-related carnage. And cannabis stocks were not immune.
This week Stockhead ran the numbers for 33 ASX companies that run either cannabis or cannabis-adjacent business models.
And for the first time we can remember, not a single company finished in positive territory over the seven days of trade.
The latest selldown comes after the sector was treading water to start the year, following the 2019 cannabis bear market which spread out globally from North America.
The main catalysts for those falls was a lack of execution by Canadian companies following the legalisation of THC products, which led to a withdrawal of institutional capital and a re-rating of the earnings outlook.
The selloff weighed on Australian companies, even though the regulatory framework around the local market drives most of the capital towards cannabis biotechs working on CBD products, rather than THC.
But while teething issues around commercialisation models in an emerging market are one thing, a global health crisis giving rise to unprecedented moves in both bonds and equities is another challenge entirely.
While market volatility spikes and investors run for cover, it seems likely that risk assets such as pot stocks will see more turbulence in the weeks ahead.
Below is a summary of weekly and annual price performance for ASX-listed cannabis stocks.
Scroll or swipe to reveal table. Click headings to sort.
Medical tech company Rhinomed (ASX:RNO) held the line to remain unchanged for the week. But the other 32 companies suffered falls of between 2.4 and 60.5 per cent.
Holding up the group was Murray River Organics (MRO), the dried fruit producer which also has a licence to grow low-THC cannabis. Murray River returned to the ASX boards after being in suspension since November, and promptly slumped by 76 per cent.