It's been close to two weeks since the legalization of recreational cannabis in Canada, and cannabis stocks across the US and Canada, well, have been lacklustre -- to say the least. As the euphoria ends, appetites for cannabis investments have also dried up.
But why?
The most simplistic answer is that some of the correction has to do with the incredible run-up of cannabis stocks before legalization.
All major players down
Since Oct. 17, shares in some of the largest cannabis companies, including Canopy Growth (TSE:WEED, NYSE:CGC), Aurora Cannabis Inc (TSE:ACB, OTCMKTS:ACBFF) and Aphira (TSE:APH, OTCQB:APHQF) are all down more than 20%.
And to continue the trend, there was a broad drop in the sector across the board on Monday.
Canopy Growth Corporation (TSE:WEED, NYSE:CGC) shares were down 14.5% at US$33.77 in New York and down 14.1% at C$43.48 in Toronto.
Aurora Cannabis Inc (TSE:ACB, OTCMKTS:ACBFF) shares dropped 16.1% to C$7.70 on Monday.
READ: Namaste Technologies Inc comes out of quiet period and looks to Cuba for opportunities
Shares of Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF) also dropped on Monday, despite positive news from the company last week that it had closed its oversubscribed bought financing deal of C$51.7 million.
Shares were down 14.1% at C$1.76 in Toronto and down 15.3% at US$1.34 in New York.
Shares of Tilray Inc (NASDAQ:TLRY) continued to tumble on Monday down 16.1% at US$90.68 following weeks of volatility.
Nanaimo, British Columbian-based Tilray has been a poster child for the run-up in pot stocks and the downfall, and has gained more than 600% from its July public offering.
Shares have experienced multiple double-digit percentage swings, both up and down.
Shares of The Green Organic Dutchman Holdings Ltd (TSE:TGOD) (OTCMKTS:TGODF) fell Tuesday down 16.8% to US$2.38 in New York and down 16.4% at C$3.12 in Toronto.
The company said last week it has plans for a spin-off company as it seeks out more international opportunities.
READ: The Green Organic Dutchman outlines plans for a spin-off as it looks to expand internationally
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada dropped 8.00% to US$228.08 on Monday.
The Horizons Marijuana Life Sciences Exchange Traded Fund, a group of marijuana stocks that trades on the Toronto Stock Exchange, was down 10.49% at C$17.07 on Monday mid-day.
Contact Katie Lewis at katie@proactiveinvestors.com
Follow her on Twitter: @kelewis