Cannabis stocks have failed to regain momentum since Canada legalized recreational use on October 17. The news that the Canada Post workers union decided to move forward with work stoppages in select areas has not helped matters.
The Horizons Marijuana Life Sciences ETF (TSX:HMMJ) was down a whopping 15% in late afternoon trading on October 22.
Aurora Cannabis (TSX:ACB) was also down 12.3% in the final hour of trading. Aurora is set to debut on the New York Stock Exchange on Tuesday. Canopy Growth (TSX:WEED)(NYSE:CGC) and Aphria (TSX:APH) were down 11.6% and 11.4%, respectively.
The Canada Post union has held its measured strike to pressure a deal without causing severe disruption. In Ontario legal cannabis can only be purchased online through the Ontario Cannabis Store (OSC), which makes the prospect of larger work stoppages at the Canada Post concerning for the fledgling industry. The strike is not the only shadow cast on the cannabis market.
New cannabis stores across Canada have struggled to meet the soaring demand in the immediate aftermath of legalization. Experts had warned of this possibility ahead of the rollout, but demand may end up surpassing what was originally projected.
Many of the top producers and industry experts have forecast that supply will not catch up to demand until the middle of 2019. This means that investors in the cannabis sector will have to contend with volatility in late 2018 and early 2019 before production ramps up.
