Cannabis stocks sank across the board on Tuesday after the US Food and Drug Administration issued a warning on CBD’s safety.
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, lost 3.4% at 117 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF fell 2.7% to C$9.02, while the OTCQX Cannabis tumbled 2.9% at 443.9 points.
Late Monday, the FDA updated its stance on CBD, saying that it may have the potential to harm users. The regulator said that a lack of scientific information on the cannabis derivative meant it couldn’t decisively conclude that CBD is safe for use in human and animal food.
Unsurprisingly the move sent a number of big-name cannabis stocks tumbling. Charlotte’s Web Holdings Inc (TSE:CWEB) (OTCMKTS:CWBHF), which is a major CBD-focused company, was down 3.2% in Canada at C$12.56 and 4.6% over the counter at US$9.30 by midmorning Tuesday.
Harvest Health & Recreation Inc (CSE:HARV) (OTCMKTS:HRVSF), a major US multistate operator, lost 6.8% in Canada and 5.9% over the counter at C$3.16 and US$2.38 respectively.
Curaleaf Holdings Inc (CSE:CURA) (OTCMKTS:CURLF), which also produces and sells CBD throughout the US, was down 3% at C$7.73 in Canada and 3% at US$5.80 on OTC markets.
It wasn’t all bad news for CBD companies on Tuesday.
Exactus Inc (OTCMKTS:EXDI) rocketed 19.3% higher at US$0.72 after it signed an endorsement and co-branding deal with high-profile Grammy-nominated Miami producers and songwriting duo Cool & Dre.
The celebrity endorsement boosted Exactus, an established point-of-care diagnostics tools healthcare company which diversified in January 2019 to pursue opportunities in hemp-derived CBD products. The company sells its CBD products through its own Exactus brand and white label products to third-party resellers.
Elsewhere, Biome Grow Inc (CSE:BIO) (OTCMKTS:BIOIF) was also up 2.5% in Canada at C$0.21 after it saw its revenue and gross profit pop in its fiscal third quarter from the previous reporting period, thanks to robust cannabis sales and despite delays in automated technology at its Highland Grow facility.
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