Canadian cannabis companies are whipping around after report says workers may face lifetime travel ban to US (TLRY, CGC, CRON)
Jonathan Garber Sep. 14, 2018, 08:06 AM
- A report out Thursday suggests workers in the Canadian cannabis industry could face a lifetime ban on travel to the US.
- Shares of Canadian cannabis companies were down as much as 15% on the news before paring their losses.
- Ballooning valuations have caused these companies to come under more scrutiny of late.
- Watch Tilray, Canopy Growth, and Cronos trade in real time.
Canadian cannabis companies are whipping around Friday morning, tumbling as much as 15% before paring their losses, following a report suggesting workers may face a lifetime ban on travel to the US.
A Politico report published after markets closed on Thursday, citing a senior official overseeing US border operations, said any Canadian working in the marijuana industry would not be permitted to enter the US. “If you work for the industry, that is grounds for inadmissibility,” Todd Owen, the executive assistant commissioner for the US Customs and Border Protection’s Office of Field Operations, told Politico.
Here’s a look at the scoreboard as of 2:35 p.m. ET:
Canada’s marijuana industry has seen valuations balloon in recent months. Tilray, for example, has seen its share price skyrocket by more than 600% since it went public in July.
The huge growth in the industry has sparked the interest of institutional and retail investors alike and has led to investments from the competing alcoholic-beverage industry. Back in August, Constellation Brands, the company behind Corona beer and Svedka vodka, announced it was investing another $4 billion in Canopy Growth, which raised its stake to 38%.
The recent interest in the space has caught the attention of the US Securities and Exchange Commission. Just last week, the SEC warned investors to watch out for promises of guaranteed returns, unregistered sellers, or unsolicited offers in marijuana names.
“If you are thinking about investing in a marijuana-related company, you should beware of the risks of investment fraud and market manipulation,” the SEC said.
“Fraudsters may try to use media coverage about the legalization of marijuana to promote an investment scam.”