Remember that friend who gets way too excited about rumors and then acts shocked when reality hits? Yeah, that was basically every cannabis investor this week.
Canopy Growth (CGC) just served up a masterclass in “buy the rumor, sell the news” – and boy, was it painful to watch. When whispers started floating around about Trump signing an executive order to fast-track marijuana rescheduling, CGC shares went absolutely bonkers, shooting up 110% in just a few days. Classic FOMO in action.
Then Thursday morning happened. Sources confirmed Trump would actually sign the thing, and CGC jumped another 24% before market open. Investors were practically doing victory laps. But here’s where it gets interesting (and by interesting, I mean brutal).
The moment Trump actually put pen to paper? Reality came knocking with a sledgehammer. CGC nosedived 12% by close. Ouch.
Why Smart Money Ran for the Hills
Look, the profit-taking wasn’t some panic move by amateur traders. It was actually pretty smart. Sure, rescheduling cannabis from Schedule I to Schedule III is huge long-term – it acknowledges medical benefits, makes research easier, and could provide tax relief. But “long-term” is doing some heavy lifting here.
Trump’s executive order doesn’t magically fix everything overnight. It just tells the DEA to hurry up with paperwork they were already doing. We’re talking 12-18 months of bureaucratic fun involving public comments, reviews, and more reviews. Meanwhile, cannabis companies are still stuck in the same regulatory maze they’ve been navigating for years.
No sudden flood of Wall Street money. No overnight operational miracles. Banks are still playing it safe, and full federal legalization remains a distant dream.
Canopy’s Real Problems Haven’t Gone Anywhere
Here’s the thing about CGC that the hype train conveniently ignored: the company’s fundamentals are still pretty rough. They’re carrying heavy debt from their “let’s buy everything” phase, revenues have been flat or declining in Canada, and they’ve been restructuring more often than a reality TV show gets rebooted.
The Canadian market is oversaturated, illegal dealers are still undercutting legal prices, and consumer preferences have shifted toward cheaper products (which kills margins). CGC’s pivot to U.S. hemp through Canopy USA? Still waiting for that to pay off.
The Bottom Line
CGC wasn’t alone in its post-signing faceplant. Tilray dropped 4.2%, Aurora Cannabis fell 3.4% – basically, the entire sector got a reality check.
Don’t get me wrong, Trump’s executive order is genuinely good news for the cannabis industry’s future. It reduces regulatory risk and signals federal acceptance of medical marijuana. But “future” is the key word here.
Smart investors now have 12-18 months to figure out which cannabis companies actually have their act together – strong operations, clear U.S. market strategies, or innovative medical applications. The hype cycle is over; now it’s time for homework.
Sometimes the best investment advice is the simplest: when everyone’s celebrating, maybe it’s time to take some profits and wait for the dust to settle.