Canadian trading had to be brought to a close several times on Wednesday after excessive price increases that were followed by extreme declines.
The marijuana business in Canada is currently boasting of having the hottest stocks with the TSX overflowing with so much money.
This development follows last week’s election in the U.S. in which Massachusetts, Maine, Nevada and California voted in favor using recreational marijuana. Some Canadian investors and medical marijuana producers see a prospective opportunity to branch out into the U.S.
One out of five of citizens in the U.S now live in states where pot has been legalized.
Canada’s Canopy Growth Corp became the first company of its kind to hit a valuation of $1 billion. This is the first publicly-traded cannabis company in the country.
The company produced the heaviest traded stock on the TSX, reaching a peak of $2 billion on Wednesday- this was followed by giving up all the gains, and then some.
According to BNN, trading in canopy had to be stopped five times on Wednesday.
The shares soared to 33 per cent from open; this was followed up with a fall of up to 27 per cent, before closing shop at around 15 per cent.
Other companies like Aurora Cannabis Inc, Supreme Pharmaceuticals Inc., Mettrum Health Corp., Aphria Inc and OrganiGram Holdings also had their shares halted.
This stock regulations are conducted by the Canada’s Investment Industry Regulatory Organization. The organization is required to cut short trading if a stock’s price changes by more than 10 per cent during a period of five minutes.
According to Bloomberg, some pot stocks experienced increments of up to 50 percent.
According to Jason Zandberg; a weed analyst who works with PI Financial, more investors keep pouring in every time the marijuana business receives publicity from the media.
Bruce Linton, the Canopy CEO says that he sees a future where marijuana will be sold just like liquor, through outlets that are run by the government. This is after Liberals set up a system that serves this purpose.
Bruce added that the company can carry a tax load of around 25 per cent, ending up with a superior product in the consumer hands on a cost-competitive basis.
The United States is still experiencing a lot of changes, from Donald Trump’s presidency to the possibility of more states approving the use of recreational marijuana. All this factors will play a huge role in Canada’s marijuana business moving into the future.