Last week, the global financial market witnessed a sell-off due to concerns about the spreading coronavirus and its impact on the global economy. The S&P 500 Index and the Dow Jones Industrial Average fell by 15.0% and 17.3%, respectively. Last week was the worst week since October 2008. However, the cannabis sector fared better than the broader equity markets. During the same period, the ETFMG Alternative Harvest ETF (NYSE:MJ) fell by 6.0%, while the Horizons Marijuana Life Sciences Index ETF (TSE:HMMJ) rose 1.0%.

With the number of coronavirus cases still rising, The Globe and Mail reported that Canadians are isolating themselves to prevent the spread of the disease. Governments have also canceled public events and closed entertainment venues. In the US, six states have announced a broad lockdown, as reported by The National Post. Meanwhile, people are buying more cannabis products to beat the stress of social isolation. On March 22, The Growth Op stated that people are stocking up on cannabis products along with essential products to survive an extended isolation period. Citing data collected by Headset Analytics, the article reported growth in recreational cannabis across US states. The growth in cannabis sales appears to have led to a rise in cannabis stocks. Let’s look at the stock performance of prominent cannabis companies last week.

Stock performance in the cannabis sector

Last week, Canopy Growth (NYSE:CGC) announced that it will temporarily close its retail stores in Canada amid the spread of coronavirus. However, the company kept its e-commerce platform open to meet customers’ needs. Despite the announcement, the stock rose 12.2%. Canopy Growth is one of the few cannabis companies with a strong balance sheet. When most of the companies struggled with weak cash positions and high debt levels, Canopy Growth’s gross cash was 2.3 billion Candian dollars at the end of the previous quarter. However, the company is still trading 37.7% lower YTD. Weakness in the cannabis sector and the broader equity market has dragged the stock down.

Last week, Bank of America upgraded Aphria (NYSE:APHA). The upgrade and strengthening cannabis sector led the company’s stock to rise by 13.7%. Despite the increase, Aphria has lost 47.2% of its stock value this year. Cronos Group (NASDAQ:CRON) stock gained 7.5% last week. The company delayed the announcement of its fourth-quarter earnings twice. The company said that there was a delay in completing its financial statements. On March 20, The Associated Press reported that the SEC sent an inquiry to Canopy Growth to retain the records of its revenue recognition techniques.

Stocks that fell last week

Last week, HEXO, Innovative Industrial Properties, and Aurora Cannabis fell by 19.5%, 16.4%, and 1.9%, respectively. Last week, HEXO announced that it didn’t file its second-quarter and half-yearly results that ended on January 31. The company had to report the results by March 16. The company said that it had incurred significant impairment losses in the last quarter. However, due to the complex nature of the impairment, the company couldn’t determine the final amount yet. So, the company delayed reporting its earnings. The delayed second-quarter earnings led to a fall in the company’s stock price.

After last week’s fall, Innovative Industrial Properties has lost 21.2% of its stock value. However, I’m optimistic about the company. Investors could utilize the fall to accumulate the stock. Last week, Roth Capital initiated coverage on the stock with a “buy” rating.