Why Canopy Growth Stock Is Flying High Today
Shares of Canopy Growth (NASDAQ: CGC) were jumping 18.7% higher as of 11:39 a.m. ET on Tuesday after soaring as much as 25% earlier in the day. The Canadian cannabis producer didn't make any announcements, so why did its shares take off? There are probably three factors that explain today's gain.
First, Senate Majority Leader Chuck Schumer, the New York Democrat, released a letter on Sunday that said cannabis banking legislation will be on the agenda for the Senate this summer. Any easing of restrictions on the cannabis industry would be good news for Canopy Growth, which has a U.S. holding company called Canopy USA.
Second, the potential for more positive news for Canopy Growth could have caused some short-sellers to scramble to cover their positions. As of June 15, nearly 9% of the stock float was sold short. That percentage could have risen since then, especially with Eight Capital analyst Ty Collin slapping a $0 price target on the beleaguered marijuana stock last week.
Source Fool.com
