The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) stock was down 1.01% close to the end of the noon hour on May 7. Green Organic Dutchman is operates as a cannabinoid-based research and development company. The company held its initial public offering on May 2, with Aurora Cannabis Inc. (TSX:ACB) purchasing 17.5% of the IPO at $3.65/unit. The stock was priced at $3.91 as of the writing of this article.
Green Organic Dutchman enters the cannabis market at a precarious moment. Cannabis stocks have been battered since a broader stock market sell-off sparked a precipitous decline in February and March. The Horizons Marijuana Life Sciences ETF (TSX:HMMJ) is down 13% in 2018 thus far but is up 7.6% month over month.
Another obstacle also threatens cannabis stocks heading into the summer. Conservative senators have attempted to delay recreational cannabis ahead of its targeted launch in the late summer of 2018. A third reading of the legalization bill in the senate will occur on or before June 7. However, recently Liberal senator Lillian Dyck also raised concerns that the federal government did not adequately consult Aboriginal communities before pursuing recreational cannabis. The Canadian Real Estate Association has also raised concerns over potential home growers and how that could impact the industry at large.
Prime Minister Justin Trudeau has reiterated that the summer of 2018 will remain the target date. Investors should remain confident that recreational legalization will be pushed through, but expect volatility ahead of the crucial vote.
