Earlier on in the week, the cannabis company Sundial Growers (NASDAQ:SNDL) saw its stock make strong gains. On Tuesday, the Sundial stock started impressively and shot up by as much as 14% on the back of heavy trading volume.
In this regard, it is important to note that many cannabis stocks, including that of Sundial, had traded higher last week as well. It has been suggested that investors are now keener on cannabis stocks because of the slew of mergers and acquisitions in the industry.
However, the rationale is much more complex than that. Investors possibly seem to believe that mergers and acquisitions will eventually help in making the industry far more stable with fewer players competing for a share of the market. At this point, Sundial looks like one of the major Canadian operators which could be in business for many years. That might be a major factor behind the latest rally in the stock.
Market Action
SNDL stock closed higher by 13% to close at $1.13. Total volume was 404.50 million shares, compared to its 30-day average volume of 135.08 million shares.
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