Eleven Canadian penny stocks hoped a name change would propel them into the next investor frenzy.
Last year, these stocks, hovering around US$1 changed their name to include "cannabis" in the hopes that their share price would get a lift from the pot investing craze. But they weren’t so lucky. Since each changed their name, the penny stocks dropped an average of 30.2 per cent through Feb. 6 and only one -- Trulieve Cannabis Corp. -- rose through yesterday’s close.
Prior to the name change, more than half of these penny stocks were involved in the precious metals business. For example, SpeakEasy Cannabis Club used to be called Hadley Mining and Integrated Cannabis Co. bore the name CNRP Mining Inc.
In the past decade, one of these stocks --- now called Heritage Cannabis Holdings Corp. -- held three different names. First, the Vancouver-based company was Trijet Mining Corp. before switching to Energy Corp. and eventually in January 2018 the stock became Heritage Cannabis Holding.
Investors don’t appear thrilled by the switch. Heritage Cannabis dropped 64 per cent to 25 cents per share since embracing "cannabis" early last year.
Legal sales of marijuana began in Canada on Oct. 17, 2018 after the Senate approved legalization the previous June which boosted pot stock sentiment.
Last August, Constellation Brands boosted its stake in Canadian grower Canopy Growth. The announcement excited investors and shares in the pot grower surged by more than 50 percent in the following weeks.
Read More: U.S. Hemp Production Acreage Expected to Triple Read More: California Cannabis Licenses Granted Plunge.
Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day