Pot stocks have been jumping of late on hopes that marijuana legislation might finally be progressing. Many were soaring last week on the news that the House was planning to vote on the MORE Act, which could lead to the legalization of marijuana in the U.S.
It may be a long shot from happening, as marijuana bills have passed the House only to fail in the Senate in the past later on. But that didn't stop pot investors from buying up the hype as shares of Tilray Brands (NASDAQ: TLRY) jumped 23% on Friday and Canopy Growth Corporation (NASDAQ: CGC) also rose by 10%. But that's nothing compared to the 143% jump in price that Clever Leaves Holding (NASDAQ: CLVR) experienced when its shares shot up to $3.84 -- the last time it reached those levels was back in December.
The company also reported its year-end results a day earlier. Although its sales of $15.4 million for fiscal 2021 are still fairly modest, they grew at a rate of 27%. Management also reiterated its forecast of reaching up to $25 million in sales for the new fiscal year. The company's operations are predominantly in Colombia but the U.S. market is one that it is focusing on in 2022. Although recreational products are illegal, the company says in January it commercially launched its CBD brand, Joysol, in the U.S. market.
However, there's no justifiable reason for the stock to have more than doubled in value in just one day besides sheer speculation. Clever Leaves is just one of many companies that would benefit from legalization. And its latest results, while positive, weren't exactly earth-shattering. Investors should be careful with Clever Leaves as this is still a risky stock to be holding.
