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Pot Stocks on the Mend After Bubble Breakdown

Pot Stocks on the Mend After Bubble Breakdown

Cannabis stocks ripped higher in the third quarter of 2018, underpinned by Canada's national legalization in mid-October and Tilray, Inc.'s (TLRY) deal with the U.S. Drug Enforcement Administration to import pot for medical research. Dow component The Coca-Cola Company (KO) added to optimism at the time, talking with Vancouver-based Aurora Cannabis about a beverage containing CBD, the non-psychoactive but medically promising plant extract. Bubble warnings were ignored during the rapid advance, encouraging a low-skilled trading crowd to jump on board, hoping for the next Amazon.com, Inc. (AMZN). Not surprisingly, pot stocks topped out quickly and turned sharply lower, trapping dumb money in a rapid decline reminiscent of the cryptocurrency plunge.