Cannabis stocks were a sea of red on Wednesday after analysts at CIBC warned investors that sales estimates were “far too aggressive” in the case of most companies.
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, lost 3% to 154.1 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF was also down 3% to C$112.77, while the OTCQX Cannabis Index dropped 4.4% to 558.3 points.
A few companies managed to shine on Wednesday despite the widespread selloff.
MjLink.com Inc’s parent company Social Life Network Inc (OTCMKTS:WDLF) gained 8% during morning trading after MJLink revealed that Hemp Depot will be the spotlight sponsor at its upcoming conference in Beverly Hills.
The MjMicro Conference, which will be held on October 16 at the Sofitel Hotel, is an invitational forum that unites publicly traded and emerging growth private cannabis companies led by seasoned executives together with high-net worth investors and financial analysts.
Shares of Social Life Network traded at US$0.11 on Wednesday morning.
The price comparison platform for pot strains is backed by cannabis pioneer Chuck Rifici, the current chair of Auxly Cannabis Group and co-founder of Canopy Growth Corporation.
"Having been involved with many historic firsts in the cannabis space, I believe that Wikileaf's entrance into the public market is a great step forward for the industry as technology companies are an underrepresented asset within the publicly traded cannabis sector," Rifici said in a statement Wednesday.
But overall investors were shaken after CIBC analyst John Zamparo’s warning that consensus estimates for revenue and adjusted earnings from other cannabis analysts are “unachievable.”
Zamparo said that stock values could be significantly impacted as poor revenue figures from smaller cannabis producers have been observed to negatively impact the larger, stronger players.
Indeed, it was the major pot giants leading the downward trend on Wednesday.
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