The Reddit Community Has Turned Its Attention to Weed Stocks

The WallStreetBets subreddit is desperately trying to find, or create, the next GameStop.
February 11, 2021, 3:54am
bud and stocks
Photos by Getty,  Martin Deja (L) and  Berkah (R)

Shares in a number of cannabis stocks surged on Wednesday, as swaths of the Reddit community responsible for sparking GameStop’s explosive upswing last month shifted their attention to weed. 

Several trending posts on the WallStreetBets subreddit—the forum that birthed the GameStop boom—have encouraged people to invest in cannabis companies over the past week, as the newly-elected U.S. administration considers legalizing the drug at a federal level.


Three of the most talked-about shares in that forum on Tuesday, notwithstanding GameStop, were Canadian weed companies Tilray, Aphria and Sundial Growers. On Wednesday, stocks for each of those companies jumped by 51 percent, 11 percent and 79 percent, respectively.

Since the Democrats took control of the U.S. Congress earlier this year, Tilray alone has soared over 600 percent. Now the Reddit trader army appears to be giving it and other companies of its ilk a further boost, as they attempt to recreate the hype that pushed GameStop shares up more than 1,650 percent in January.

Toward the end of last month, GameStop—a bricks-and-mortar video game retailer—became the most highly traded asset in the U.S., a “meme stock,” and the online battleground for a micro class war.

As Motherboard explained in late-January: “A bunch of Redditors in the r/WallStreetBets subreddit … analyzed GameStop stock and concluded that its price was undervalued. They then, over the course of months, identified a weakness in the strategies of several giant hedge funds that had bet many millions of dollars that GameStop would fail. 

“These Redditors purchased huge numbers of GameStop stock at low prices (and then kept buying more as the prices rose), held it, and are currently forcing something known as a ‘short squeeze’ that is driving the price up and is emptying these hedge funds in the process.”

The GameStop bubble has well and truly burst, and stories of spectacular trading losses are piling up in a new subreddit called GMEbagholdersclub. But since then, the eight million-strong WallStreetBets community responsible for its brief spike has become highly influential in the stock market. Following the GameStop surge, retail investors similarly boosted the share price of meme-based cryptocurrency Dogecoin, as well as that of movie theatre company AMC Entertainment, which was subsequently brought back from the brink of bankruptcy.


Now some of those Redditors have redirected their energy toward weed stocks.

“The biggest Weed/Cannabis companies on a rip! It’s not too late to get into one of the biggest and best potentials!” reads one post in r/WallStreetBets. “I missed the Gamestop boat, but I don't think we're gunna miss this one," reads another.

It’s not clear how long this latest share surge is going to last. Some analysts argue that the valuations of the cannabis companies are already becoming unjustifiable, especially for those like Tilray, Aphria and Sundial Growers that are based in Canada and may see little benefit from any changes in U.S. legislation.

In any case, Tim Welsh, founder and CEO of wealth management consulting firm Nexus Strategy, suggests that those currently holding shares in weed companies didn’t buy in for the money; they bought in to rattle the cages and make another statement about the power of organised action. In that sense, marijuana may just be the latest front in this micro class war.

“This is totally on script for the anti-establishment movement on WSB and Reddit. They are feeling their crowdfunding oats and are now aiming it at whatever social disruption they can cause,” Welsh told CNBC. “And no better historical symbol to amplify personal freedom and revolution than pot.”

Some members of the WallStreetBets subreddit, however, have expressed suspicion that the community, instead of sticking it to the man, is being co-opted by profiteers.

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