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flower power

Why are weed stocks rallying?

Canada’s growing export market, potential moves on de-banking, and Tilray’s JetBlue deal contributed to a rally in weed stocks.

J. Edward Moreno

2/5/25 2:06PM

Cannabis stocks rallied on Wednesday amid a smattering of upbeat news after a gloomy year.

As always, it’s difficult to pinpoint what causes a swing in cannabis stocks. The cohort lacks significant institutional investment, so stock prices are less tied to analyst ratings or estimates. Most cannabis companies are also penny stocks, meaning they’re more susceptible to outsized percentage swings: a $1 stock that gains 25% in one day is still only worth $1.25.

But we try our best. Some things that happened today:

Will Canadian cannabis become an export market?

Aurora Cannabis, a Canadian cannabis operator, reported “record-breaking” earnings on Wednesday that beat analyst expectations. It reported $21.8 million in net income, compared to the $1.4 million loss analysts on FactSet were expecting. It also reported $61.6 million in sales compared to the $55.7 million analysts forecast.

Aurora’s growth was primarily thanks to its international sales. Increasingly Canadian cannabis companies, struggling to grow domestically, are exporting cannabis to Europe and other countries where it is regulated.

Aurora’s success appeared to give investors hope that its peers in the Canadian market may also benefit from increased international sales. Canopy Growth, Cronos Group, and SNDL Inc. each rallied on Wednesday after Aurora reported.

Canopy, which reports earnings on Friday, saw increased options activity. Call activity spiked on Wednesday and is on track to reach its highest one-day total since May. Some of the most active contracts are calls with strike prices of $2 and $3 that expire on Friday.

In other news

Tilray, which is now as much of a booze company as it is a cannabis company, announced that its Montauk beers would soon become available on JetBlue domestic and international flights.

The Senate Banking Committee held a hearing on Wednesday on de-banking, an issue that plagues US cannabis operators, which are often ditched by their banks with little notice because their business is federally illegal and could create a liability for the financial institution.

While the hearing specifically pertained to “federally legal” business, senators were urged by one of the witnesses, Aaron Klein of the Brookings Institution, to pass the Secure and Fair Enforcement (SAFE) Banking Act, which would provide legal protections for banks that service cannabis operators with state licenses.

Max Knoblauch

Amazon is testing adding GM electric vans to its EV delivery fleet dominated by Rivian

Rivian may have some competition in its electric delivery van division: Bloomberg reports that Amazon is testing a small number of GM’s BrightDrop vans for its fleet.

According to Amazon, the test currently only includes a dozen of the vehicles. Amazon’s fleet also contains EVs from Ford, Stellantis, and Mercedes-Benz.

GM debuted BrightDrop in 2021, but the vehicles have struggled to sell and piled up on GM lots due to high prices and steep competition. GM began offering up to 40% rebates on the vehicles this year.

The test comes as Rivian struggles through tariffs and the end of EV tax credits. Earlier this year, it lowered its annual delivery outlook by about 13%. As of June, Amazon said it has more than 25,000 Rivian vans across the US. Earlier this week, Rivian CEO RJ Scaringe said the company is still on track to deliver 100,000 vans to Amazon by 2030 and is “thinking about what comes beyond” that initial target.

GM has sold 1,592 BrightDrop vans through the first half of the year, more than the full-year total it sold in 2024.

Amazon Tests GM EV Delivery Vans in Bid to Meet Climate Goals

GM debuted BrightDrop in 2021, but the vehicles have struggled to sell and piled up on GM lots due to high prices and steep competition. GM began offering up to 40% rebates on the vehicles this year.

GM has sold 1,592 BrightDrop vans through the first half of the year, more than the full-year total it sold in 2024.

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Shake Shack is launching a French onion soup... burger

The fast-casual chain will be hoping premium upsells can fatten up its profit margins.

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Paramount Skydance reportedly preparing an Ellison-backed Warner Bros. Discovery takeover bid, sending shares soaring

Paramount Skydance is preparing a majority cash bid for Warner Bros. Discovery, The Wall Street Journal reported, sending shares of both companies surging. The Journal’s sources say the deal is backed by the Ellison family, led by David Ellison.

WBD shares were up 30% on the report, while Paramount Skydance jumped 8%.

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If the deal goes through, it would bring together HBO, CNN, DC Studios, and Warner Bros.’ film library with Paramount+, Nickelodeon, and MTV, all under one umbrella.

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As tariffs take root, August new vehicle prices climb by the most in more than 2 years

According to data from Cox Automotive, 17 vehicle brands raised prices of their new vehicles by more than 3% in August.

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