CNBC reported Tuesday Marijuana stock Tilray plunges 16% after PepsiCo CFO says company has no pot plans
- Shares of volatile cannabis company Tilray dropped as much as 20 percent Tuesday after PepsiCo told investors it has no plans to invest in pot.
- “I think the difficulties in investing in that category, particularly in the U.S., where federally these things are still not legal, are quite a considerable challenge,” Pepsi’s CFO said.
Cannabis stocks fell across the board Tuesday after PepsiCo told investors that the food and beverage giant said it has no plans to invest in marijuana.
Though most of the marijuana stocks opened Tuesday without much fanfare, they took a leg lower after PepsiCo Chief Financial Officer Hugh Johnston told Cowen analyst Vivien Azer on the company’s earnings conference call that the company is steering clear of pot for now.
“I think the difficulties in investing in that category, particularly in the U.S., where federally these things are still not legal, are quite a considerable challenge,” he said on the call. “So we look at everything, but certainly no plans at this point to do anything.”
Tilray, one of the most volatile of the weed equities, lost about one-fifth of its value at one point.
The shares closed lower by 16 percent. Peers Canopy Growth dropped 7.4 percent while HEXO shed 9.4 percent in Toronto. Tilray is a medical cannabis producer.
Shares of Aurora Cannabis, which had reportedly at one time been in talks with Coca-Cola for weed-infused beverages, fell 5 percent on the Toronto stock exchange.
“For Tilray, and a very limit amount of shares, trading action is a lot of everyday news speculation and it can move around the stock around one way or another,” said ROTH Capital Partners analyst Scott Fortune.
“There’s still a lot of speculation in the space for partnerships, but I think it will take time to play out,” he added.
Shares of PepsiCo, meanwhile, lost 1.8 percent Tuesday. Johnston later told CNBC in an interview, “I think we’ll look at it critically, but I’m not prepared to share any plans that we may have in the space right now.”