Marijuana Stocks Fall As Canada’s Recreational Legalization Begins

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Marijuana stocks Canopy Growth (CGC), Tilray (TLRY) and Cronos Group (CRON) jabbed lower Wednesday as Canada became the second nation in the world to legalize recreational marijuana.

Canopy Growth, which tore higher this summer on news that Corona parent Constellation Brands (STZ) would invest billions in it, fell 4.7% in the stock market today. Tilray (TLRY), whose thin supply of shares made it particularly susceptible to price swings last month, lost 6.4%. Cronos Group (CRON) tumbled 7.55%.

Some analysts and industry observers had said that the prices of marijuana stocks already reflected the benefits of legalization. And after months of planning, investing and consolidation, the legalization could also mark the beginning of steeper expectations.

Others have predicted that marijuana stocks could be volatile for years, as individual investors rush in and out on headlines and hype. Others advise not to get distracted by the circus of the recreational market. The global medical marijuana market, they say, is where the action is.

Earlier in the week, Cronos deepened its focus on cannabinoids through a sponsored-research agreement with the Technion Research and Development Foundation, a group that is part of the Israel Institute of Technology. Cannabinoids are the compounds in the cannabis plant like THC, CBD and others.

Cronos and Technion will “explore the use of cannabinoids and their role in regulating skin health and skin disorders.”

Canopy Growth this week also said it would acquire Colorado-based Ebbu, a cannabis research company.

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